Bingshan Refrigeration & Heat Transfer
Technologies Co., Ltd.
2023 Annual Report
April, 2024
1
Section 1 Important Notice, Table of Contents, and Definitions
The directors and the Board of Directors, the supervisors and the Supervisory
Board, and Senior staff members of Bingshan Refrigeration & Heat Transfer
Technologies Co., Ltd. (hereinafter referred to as the Company) hereby confirm
that there are not any important omissions, fictitious statements or serious
misleading carried in this report, and shall take all responsibilities, individual
and/or joint, for the reality, accuracy and completeness of the whole contents.
Chairman of the Board of Directors of the Company Mr. Ji Zhijian, Financial
Majordomo Mrs. Wang Jinxiu and the head of Accounting Department Mr. Li
Sheng hereby confirm that the financial report of the annual report is true and
complete.
All the directors have attended this Board meeting of the Company.
There is no significant risk having adverse influence on attainment of the
Company's future development strategy and business targets. The paragraph "
The prospect of the Company's future development " in Section 3 of this Annual
Report describes major risks the Company may be confronted with, including
the risk of Increasing market competition risk, the market promotion for new
product and new technology slow, and the Accounts receivable is on the high side.
See the related sections for the countermeasures to be taken by the Company.
The profit distribution proposal reviewed and adopted at this Board meeting of
the Company is: Based on the total capital stock of 843,212,507 shares, the
dividend of RMB 0.3 in cash (including tax) will be distributed for every 10
shares; The Company will not transfer the capital reserve to increase capital
stock.
This report is written respectively in Chinese and in English. In the event of any
discrepancy between the two above-mentioned versions, the Chinese version
shall prevail.
2
CONTENTS
Section 1 Important Notice, Table of Contents, and
Definitions……………………………………………………………...................................................…………...2
Section 2 About the Company and Main Financial Indicators .................................................................................. 6
Section 3 Management discussion and analysis ........................................................................................................ 9
Section 4 Corporate governance .............................................................................................................................. 20
Section 5 Environmental and social responsibility .................................................................................................. 29
Section6Importantitems……………………………………………………………………………………….……30
Section 7 Change in Share Capital and Shareholders' Information…………………………………… ...……... ...34
Section 8 Information on Preferred Stock ............................................................................................................... 37
Section 9 Information on Corporate bonds .............................................................................................................. 38
Section 10 Financial Report..................................................................................................................................... 39
3
Reference Documents
The accounting statements bearing the signatures and seals of the legal representative, the financial majordomo
and the accountants in charge.
2. The original copies of all the Company's documents and the original copies of the bulletins published on the
newspapers designated by the China Securities Regulatory Commission in the report period.
3. Time for reference: from Monday to Friday 8:00 - 11:30 (am) 1:00 - 4:30 (pm)
Liaison persons: Mr. Song Wenbao, Ms Du Yu
Tel: 0086-411-87968130
Fax: 0086-411-87968125
4
Definitions
Defined item Stands for Meaning
Reporting period Stands for From Jan. 1, 2023 to Dec. 31 2023
The Company, this Company Stands for Bingshan Refrigeration & Heat Transfer Technologies Co.,Ltd.
Dalian Bingshan Group Engineering Co., Ltd.,one of the subsidiaries of the Company where
Bingshan Engineering Company Stands for
the Company holds 100% of its shares.
Sonyo Compressor (Dalian) Co., Ltd. Formerly Panasonic Appliances Compressor (Dalian)
Sonyo Compressor Stands for Co., Ltd. one of the subsidiaries of the Company, where the Company holds100% of its
shares.
Sonyo Refrigeration (Dalian) Co., Ltd. Formerly Panasonic Appliances Air-conditioning
Sonyo Refrigeration Stands for and Refrigeration (Dalian) Co., Ltd., one of the subsidiary of the Company, where the
Company holds 100% of its shares indirectly.
Wuhan New World Refrigeration Industry Co., Ltd., one of the subsidiaries of the Company
Wuxin Refrigeration Stands for
where the Company holds 100% of its shares.
Dalian Bingshan Guardian Automation Co., Ltd. one of the subsidiaries of the Company
Bingshan Guardian Stands for
where the Company holds 100% of its shares.
5
Section 2 About the Company and Main Financial Indicators
Company information
Short form of the stock Bingshan; Bingshan B
Stock code 000530; 200530
Listed stock exchange Shenzhen Stock Exchange
Legal name in Chinese 冰山冷热科技股份有限公司
Legal name abbreviation in Chinese 冰山冷热
Legal English name Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Legal English name abbreviation Bingshan
Legal representative Ji Zhijian
Registered address No.106, Liaohe East Road, Dalian Economic and Technological Development Zone
Post code of Registered address 116630
Due to the overall relocation, the registered address of the Company was changed
Historical changes of the Company's
from 888 Southwest Road, Shahekou District, Dalian to 106 Liaohe East Road,
registered address
Dalian Economic and Technological Development Zone in March 2017.
Office address No.106, Liaohe East Road, Dalian Economic and Technological Development Zone
Post code of Office address 116630
Internet web site of the Company www.bingshan.cn
E-mail of the Company 000530@bingshan.com
II. Contact persons and information
Secretary of the Board of Directors Authorized representative for securities affairs
Name Song Wenbao Du Yu
Bingshan Securities﹠Legal Affairs No.106, Liaohe Bingshan Securities﹠Legal AffairsNo.106, Liaohe
Address East Road, Dalian Economic and Technological East Road, Dalian Economic and Technological
Development Zone Development Zone
Tel. 0411-87968130 0411-87968822
Fax 0411-87968125 0411-87968125
E-mail 000530@bingshan.com 000530@bingshan.com
III. Information disclosure and place of preparation for inquiry
Stock exchange website where companies disclose annual
Shenzhen Stock Exchange
reports
Name of the newspaper designated the address of the China Securities Daily, Securities Times and
website for publishing this Annual Report http://www.cninfo.com.cn
Place where this Annual Report was prepared for inquiry Securities﹠Legal Affairs Department of the Company
IV. Alteration to the registration
Organization code 912102002423613009
Change in main business since the Company was listed No change
Changes in the holding shareholder No change
6
V. Other related information
Accounting firm engaged by the Company
Name of accounting firm ShineWing CPAs (Special General Partnership)
Office location of accounting firm 9/F,A Building No.,8 north street of Chao Yang Men, Dong Cheng District Beijing, China
Name of signing certified public accountant Sui Guojun, Zhang Shizhuo
Sponsor the Company appointed for performance of the consistent supervision duty in the reporting period
□ Applicable √ Not applicable
Financial consultant the Company appointed for performance of the consistent supervision duty in the reporting
period
Applicable □ Not applicable
Office location of accounting Name of sponsor of financial Continuous supervision
Name of Financial consultant
firm advisor period
Guotai Junan Building, 768
Guotai Junan Securities Co., From November 11, 2022 to
Nanjing West Road, Jing 'an Dong Shuai、Li Xiang
LTD December 31, 2023
District, Shanghai
VI. Main accounting data and financial indicators
Did the Company retroactively adjust or restate the accounting data of previous years due to change in the
accounting policy and correction of accounting mistakes?
√Applicable □ Not applicable
Increase/decrease compared with
2023 2022 2021
previous year
Operating revenue 4,815,941,467.70 2,893,085,310.29 66.46% 2,089,208,256.22
Net profit attributable to shareholders of listed
49,375,900.83 18,731,969.48 163.59% -269,606,893.80
companies
Net profit belonging to the shareholders of
listed companies after the deduction of 16,483,449.17 -272,983,508.15 106.04% -355,596,997.40
non-recurring profit and loss
Net cash flow from operating activities -24,440,667.74 -56,247,299.36 56.55% 1,518,218.37
Basic earnings per share 0.06 0.02 200.00% -0.32
Diluted earnings per share 0.06 0.02 200.00% -0.32
Weighted average return on net asset yield 1.63% 0.61% Inecrease 1.02 percentage points -8.31%
Increase/decrease compared with
2023.12.31 2022.12.31 2021.12.31
previous year
Total assets 8,162,848,294.25 7,601,935,329.60 7.38% 5,735,570,604.67
Owner's equity attributable to shareholders of
3,047,513,577.75 3,006,120,427.03 1.38% 3,002,295,794.00
listed companies
The lower of the Company’s net profit before and after deduction of non-recurring gains and losses in the most
recent three fiscal years are all negative, and the audit report in the last year shows that the Company's ability to
continue operations is uncertain
□ Applicable √ Not applicable
7
The lower of the net profit before and after non-recurring gains and losses is negative
□ Applicable √ Not applicable
VII.1.Difference of accounting data between as per Chinese accounting standards and as per
International Accounting Standards
□ Applicable √ Not applicable
2. Difference of accounting data between as per Chinese accounting standards and as per
Foreign Accounting Standards
The difference of accounting data between as per Chinese Accounting Standards and as per International
Accounting Standards was 0.
3.Explanation of reasons for differences in accounting data under domestic and foreign
accounting standards
√Applicable □Not applicable
The difference of accounting data between as per Chinese Accounting Standards and as per International
Accounting Standards was 0.
VIII. The quarter main financial indicators
the first quarter the second quarter the third quarter the fourth quarter
Operating revenue 1,072,560,425.76 1,254,976,287.29 1,274,571,520.64 1,213,833,234.01
Net profit attributable to shareholders of listed companies 25,392,393.54 32,022,005.68 14,469,128.62 -22,507,627.01
Net profit belonging to the shareholders of listed
companies after the deduction of non-recurring profit and 13,312,360.06 32,145,810.46 1,479,838.85 -30,454,560.20
loss
Net cash flow from operating activities -158,425,157.75 31,630,960.77 -39,477,287.33 141,830,816.57
IX. Non-recurring profits and losses and their amounts
item 2023 2022 2021
Disposal gains and losses of non-current asset -6,656,241.40 109,194,830.34 27,724,344.91
Government subsidies included in current profit or loss 8,263,130.89 11,878,746.43 15,993,001.31
Debt restructuring gains and losses 1,791,602.29 230,467.42 819,297.68
Profit or loss arising from contingencies unrelated to the
10,206,786.86 -2,019,000.00
normal operation of the company
Disposal gains from investments on financial assets
available for sale, and gains from fair value change of 14,073,910.32 -3,694,509.36 55,245,024.14
financial assets available for sale
Reversal of impairment provisions for accounts receivable
3,784,207.57
subject to separate impairment testing
The one-time expenses incurred by the enterprise due to the
3,928,060.93
discontinuation of related business activities
Other non-operating revenue or expense 2,831,968.96 8,754,118.59 -5,129,941.48
Other profit and loss items that meet the definition of non
170,729,805.79
recurring profit and loss
Influence on income tax 5,162,725.13 2,961,966.70 8,490,868.44
Influence on minority shareholders 168,249.63 397,014.88 170,754.52
Total 32,892,451.66 291,715,477.63 85,990,103.60
8
Section 3 Management discussion and analysis
The industry situation of the Company during the reporting period
1. Industry development trend
In recent years, the refrigeration and air conditioning industry has played an increasingly prominent role in
national strategies such as food safety, energy security, consumption upgrading, energy conservation and carbon
reduction. The high-end, digital, green, and service-oriented development of the industry has been rapid.
In 2023, the refrigeration and air conditioning industry is still facing a complex domestic and international market
situation, with intensified market competition, difficulties in improving efficiency, and high accounts receivable,
which continue to plague the operation and development of the industry.
In 2024, industry development will continue to differentiate and competition will continue to intensify. The
transformation and upgrading of major enterprises in the industry will accelerate, and the pace of high-quality
development will become more stable.
2. Challenges and opportunities faced by the Company
(1)Opportunities faced by the Company
Energy conservation, carbon reduction and improving energy efficiency have become the consensus of the whole
society; Overall promotion of the national "double carbon" strategy; The 14th five year plan for the development
of cold chain logistics has been issued, and the market demand for cold chain equipment is expected to grow
rapidly; With the promulgation of the new cold storage design standard, the use opportunities of ammonia
refrigerant have increased.
With the strong technology bases, innovative business model, and system advantages, the Company is capable of
capturing the above opportunities in a good position.
(2)Challenges faced by the Company
The cultivation of energy conservation and emission reduction market still needs time; the transformation and
upgrading process is complex.
II. The Company’s Main business during the reporting period
Focusing on the hot and cold industry, the Company is committed to the development of industrial
refrigeration and heating business, commercial refrigeration business, air conditioning and environment
business, engineering and service business and new business fields, covering the key areas of the hot and
cold industry chain and creating a complete hot and cold industry chain.
The Company's main products include piston and screw refrigeration compressors/units, as well as pressure
vessels, combination warehouses, controlled atmosphere preservation warehouses, refrigeration stations, etc.
The Company provides product sales and comprehensive solutions for both domestic and international
markets, with self operated sales as the main focus and channel sales as the auxiliary.
In 2023, rigid demands such as food safety, energy security, consumption upgrading, energy conservation
and carbon reduction will benefit the refrigeration and air conditioning industry; At the same time, the
refrigeration and air conditioning industry is also facing issues such as intensified market competition and
difficulties in improving efficiency. Faced with opportunities and challenges, the Company focuses on the
hot and cold industries, continuously delving into advantageous segmented markets such as cold chain
logistics, petrochemicals, beer and dairy products, meat slaughter, ship refrigeration, ice and snow venues,
polycrystalline silicon, and vigorously expanding new businesses such as CCUS, ORC, energy storage
thermal management, actively expanding and seizing the domestic market.
1. Industrial refrigeration and heating business
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Industrial refrigeration is an important field reflecting the core technology of the Company. After years of
development, the Company has been close to the technical level of the main international competitors in the
field of industrial refrigeration, and has achieved catching up in some fields. Based on the traditional
refrigeration, the Company realizes the balance of cold and heat through the utilization of heat, which greatly
improves the energy utilization rate.
During the reporting period, the Company signed multiple projects with industry giants such as BASF,
Covestro, PetroChina, and Sinopec, and the influence of Bingshan brand in the industry continued to
increase.
2. Commercial refrigeration business
Commercial refrigeration is the Company's core business. In China, the Company takes the lead in opening
up the green intelligent cold chain from the first kilometer of the field to the last 100 meters of the residential
community, which is the competitive advantage of the Company.
Focusing on food refrigeration, the Company has patented products pre-cooling from the field, all kinds of
quick freezing equipment and refrigeration facilities of various specifications, and China's leading experience
in the design and installation of large-scale ammonia and carbon dioxide refrigerators. On the basis of
absorbing the relevant experience of Japan, Europe and the United States, combined with China's new needs,
to provide newer products, better solutions and fresher experience for the field of food freezing and
refrigeration.
During the reporting period, the Company successfully signed multiple key projects, including the expansion
project of the Red Star Cold Chain Direct Supply Center, the Fengchu Langfang Central Kitchen project, the
Shanxi Wuzhai Quick Frozen Corn project, and the supply and marketing cold chain logistics project.
3. Air conditioning and environment business
In recent years, relying on the complete industrial chain, the Company has continuously carried out
transformation and upgrading in the field of air conditioning and environment, developed more
energy-saving and environmental protection products around the blue sky project, and accelerated the
transformation and upgrading from air treatment to environmental governance.
At present, the Company has developed a series of innovative products around the market segments of
commercial air conditioning, central air conditioning and special air conditioning, and provides
corresponding solutions in different segments around these innovative products. For hospitals, electronic
factories, high-end real estate, rail transit and other fields, provide targeted solutions.
During the reporting period, the Company increased its investment in its subsidiary, Bingshan Air
Conditioning, by 30 million yuan to support the development of the air source heat pump industry.
4. Engineering and service business
Cold and hot engineering and service are the Company's advantageous business fields. In recent years, the
Company has realized transformation and upgrading from the manufacturer of cold and hot equipment to the
service provider of comprehensive solution of cold and hot through the development of engineering and
service industry, and realized the dual wheel drive of the enterprise, and provided more professional and
accurate services to each segment market, and constantly created new value for customers and realized
common growth.
At present, the Company focuses on petrochemical technology, refrigeration, central air conditioning, ice and
snow engineering, artificial environment and other market segments. Relying on the enterprise's industrial
chain, value chain and ecosystem, the Company provides services from consulting, planning, design to
manufacturing, installation, commissioning and service in the whole process and life cycle. At the same time,
according to the needs of customers, promote the combination of industry and finance, and provide services
10
for customers through the form of project general contracting and financial leasing.
During the reporting period, the Company increased its investment in its subsidiary Bingshan Engineering by
100 million yuan and strengthened the construction of large-scale engineering platforms.
5. New business
With the deepening of China's economic transformation and upgrading, as well as the continuous
introduction of environmental governance policies, the domestic industrial energy conservation and
environmental protection industry is growing rapidly, the level of energy conservation and consumption
reduction of enterprises and the comprehensive utilization of resources is constantly improving, and the
energy industrial structure has changed. Strengthening the optimal utilization of energy has become a
development trend. For low-grade energy recycling, the Company provides customers with a series of
energy-saving, environmental protection, efficient new products, in line with the national strategic
requirements of energy conservation, carbon reduction and sustainable development, and contributes
professional wisdom to the national carbon peak and carbon neutral strategy.
During the reporting period, the Company made good progress in new businesses such as CCUS, ORC, and
energy storage thermal management.
III. Analysis of core competence
The Company focuses on main business of refrigeration and heating; independent R&D and joint
venture partnerships are cooperate with each other effectively; capital resources integration and
business model innovation are in a positive interaction; the community of business and interest are
being multi-storey created; the develop mode with Bingshan characteristic are formed.
The Company has the integrated refrigeration and heating industrial chain for offering kinds of
comprehensive solution services, including design, manufacture, installation and maintenance etc.,
and can satisfy individual requirements preferably.
The Company possesses a mature and solid marketing networks and after-sale service network
on/off-line, and can offer high quality and high value-added services more initiative and faster for
clients from around the city.
Following the technical route of cold and heat balance, the Company has independently developed a
series of energy-saving, environment-friendly, efficient and intelligent cold and heat technologies
and products, and actively fulfilled the dual carbon responsibility.
While promoting the transformation and upgrading of its inherent business in an orderly manner,
the Company actively cultivates new momentum for development, and the path of sustainable
growth is increasingly clear.
During the reporting period, the Company focused on the hot and cold business, deeply cultivated
the market segment, and steadily improved its sales force, product force, technical force,
engineering force and service force, so as to further enhance its core competitiveness.
IV. Analysis of main business
1. summarize
In 2023, the Company focuses on the hot and cold business, deeply cultivates segmented markets, solidly
enhances core competitiveness, effectively expands industry influence, and continuously strengthens its main
business. In 2023, the Company achieved an operating revenue of 4,815.94 million yuan, an increase of
66.46% year-on-year; The net profit attributable to the shareholders of the listed company was 49.38 million
yuan, , an increase of 163.59% year-on-year.
11
During the reporting period, the Company adhered to principles of innovation and accelerated development.
We have independently developed multiple outstanding products, including CO2 transcritical products, heat
pump products, and energy storage thermal management products. The Company's CO2 boosting
liquefaction device was selected as an innovative product at the 2023 China Refrigeration Exhibition. The
Company's falling film semi enclosed screw ice water unit has been selected for the 2022 China
Refrigeration Society Energy Conservation and Ecological Environment Product and Technology Catalog.
The key technology research and industrialization of the Company's CO2 subcritical and transcritical cold
and heat coupling system has won the first prize of Dalian Science and Technology Progress Award. The
Company has been listed as a "Green Factory" in the 2023 Green Manufacturing List of the Ministry of
Industry and Information Technology.
During the reporting period, the subsidiary of the Company, Bingshan Engineering Company, and Sonyo
Refrigerator, collaborated efficiently and continued to deepen their market segmentation. In the field of
product business, actively serving high-end customers, and signing multiple projects with industry giants
such as BASF, Covestro, PetroChina, and Sinopec; Continue to lead the polysilicon market and vigorously
expand the lithium chemical market. In the field of engineering, multiple key projects including the
expansion project of Red Star Cold Chain Direct Supply Center, Fengchu Langfang Central Kitchen Project,
Shanxi Wuzhai Quick Frozen Corn Project, and Supply and Marketing Cold Chain Logistics Project have
successfully won the bid. In the field of energy industry, CCUS projects and energy storage thermal
management projects have been rapidly promoted.
During the reporting period, the Company's subsidiary, Sonyo Compressor, achieved independent innovation
and qualitative growth. R290 DC variable frequency vortex compressor for heat pump hot water has been
selected as an innovative product at the 2023 China Refrigeration Exhibition. The high-power vortex
compressor used in air source heat pump units has been selected as the "Guiding Catalogue for the
Promotion and Application of Liaoning Province's First (Set) Major Technical Equipment". Awarded as a
national level intelligent manufacturing excellent scene, provincial-level intelligent factory, provincial-level
green factory, and provincial-level quality benchmark. Awarded the title of "Excellent Supplier" by Songz
and Tongfei, with orderly expansion of energy storage facilities.
During the reporting period, the Company's newly added subsidiary, Sonyo Refrigeration, implemented
business adjustments to pursue synergies. Peel off the multi unit air conditioning business and focus on the
industrial energy-saving market, resulting in a significant year-on-year increase in orders. The marine lithium
bromide absorption refrigeration unit has been selected as the "Guiding Catalogue for the Promotion and
Application of the First (Set) Major Technical Equipment in Liaoning Province". Independently developing
Stirling flue gas generators to help reduce the cost of gas heat pump air conditioning products.
During the reporting period, the Company's subsidiary, Wuhan New World Refrigeration continued to
optimize its products and solutions. Professional support for energy security, with a significant increase in
sales of underground cooling devices in mines. Optimize the development of oil-free screw compressors and
actively expand the gas compression market. The water vapor screw compressor unit was selected as an
innovative product at the 2023 China Refrigeration Exhibition and the 2022 China Refrigeration Society
Energy Conservation and Ecological Environment Product and Technology Catalog.
12
During the reporting period, the subsidiary of the Company, Bingshan Guardian, focused on energy-saving
control and innovative development of cold and hot systems. Develop a battery management system for all
vanadium flow battery control systems, and collaborate deeply with key customers such as Rongke Power
and Kaifeng Times Power. Building a 5G fully connected factory and rapidly advancing digital
transformation. Selected as a pilot demonstration enterprise for the integrated application of "5G+Industrial
Internet".
2. Sales income and costs
(1) Sales income structure
2023 2022
Year-on-year
Proportion to the Proportion to the
Amount Amount increase/decrease
Sales costs Sales costs
Total sales income 4,815,941,467.70 100% 2,893,085,310.29 100% 66.46%
By industry
Refrigeration and
air-conditioning 4,708,789,817.06 97.78% 2,803,347,359.37 96.90% 67.97%
equipment
Others 107,151,650.64 2.22% 89,737,950.92 3.10% 19.41%
By product
Industrial product 3,357,438,836.06 69.72% 1,920,458,161.82 66.38% 74.82%
Installation works 1,294,663,341.77 26.88% 857,764,430.03 29.65% 50.93%
Others 163,839,289.87 3.40% 114,862,718.44 3.97% 42.64%
Domestic sales 4,278,214,645.22 88.83% 2,713,167,600.04 93.78% 57.68%
Foreign sales 537,726,822.48 11.17% 179,917,710.25 6.22% 198.87%
(2) Main business structure
Increase/decrease of Increase/decrease
operating revenues of operating costs Increase/decrease of gross profit on
Operating revenue Operating costs Gross profit
on a year-on-year on a year-on-year a year-on-year basis
basis basis
By industry
Refrigeration and
4,708,789,817.06 3,931,870,621.80 16.50% 67.97% 59.84% Increase 4.25 percentage points
air-conditioning
By product
Industrial product 3,357,438,836.06 2,690,266,141.68 19.87% 74.82% 67.86% Increase 3.32 percentage points
Installation works 1,294,663,341.77 1,195,610,122.48 7.65% 50.93% 43.40% Increase 4.85 percentage points
Others 56,687,639.23 45,994,357.64 18.86% 125.62% 95.98% Increase 12.27 percentage points
By region
Domestic sales 4,171,062,994.58 3,535,346,049.38 15.24% 58.99% 53.36% Increase 3.11 percentage points
Foreign sales 537,726,822.48 396,524,572.42 26.26% 198.87% 156.41% Increase 12.21 percentage points
By sales model
Total 4,708,789,817.06 3,931,870,621.80 16.50% 67.97% 59.84% Increase 4.25 percentage points
（3）Was the Company's sales income on material objects more than that on labor service?
√ Yes □ No
Year-on-year
Industry category Item 2023 2022
increase/decrease
Sales volume 836,513 125,863 564.62%
Main refrigeration unit for
Production output 873,086 125,675 594.72%
industrial or commercial use
Inventory level 108,409 75,587 43.42%
13
Reason for change in the related data by 30% or higher on a year-on-year basis
√Applicable □ Not applicable
The Company completed the acquisition of Sonyo Compressors and Sonyo Refrigeration System in November
2022, and completed the acquisition of Sonyo Refrigeration in June 2023. During the reporting period, three
subsidiaries of Panasonic were included in the statistical scope, and there were significant year-on-year changes in
relevant data.
（4）Performance of major sales contracts and major procurement contracts signed by the company up to
the reporting period
Applicable √ Not applicable
（5）Sales cost structure
2023 2022
Proportion to the Year-on-year
Industry category Item Proportion to the
Amount Amount increase/decrease
operating costs operating costs
Direct materials 3,289,266,971.15 82.12% 2,205,570,125.13 86.92% 49.13%
Labor wages 484,370,022.22 12.09% 208,996,790.95 8.24% 131.76%
Refrigeration and Depreciation 75,764,314.69 1.89% 33,450,400.07 1.32% 126.50%
air-conditioning Utilities 31,810,562.98 0.79% 19,274,676.78 0.76% 65.04%
Others 124,385,587.16 3.11% 70,236,848.47 2.77% 77.09%
Total operating costs 4,005,597,458.19 100.00% 2,537,528,841.40 100.00% 57.85%
(6) Was the Company's consolidated range change during the reporting period?
Applicable Not applicable
The entity included in the consolidated financial statements this year has increased by one compared to the
previous year. During the reporting period, the Company acquired 40% equity of Panasonic Refrigeration (Dalian)
Co., Ltd. ("Panasonic Refrigeration") held by Panasonic Electric (China) Co., Ltd; Acquired 60% equity of
Panasonic Refrigeration held by Sanyo Electric Co., Ltd. After the completion of the equity transfer, the Company
holds 100% equity of Panasonic Refrigeration and is included in the scope of consolidation.
(7) Major change or adjustment in the Company's products or service in the reporting period
□ Applicable √ Not applicable
(8) Information on the Company's major customers and major suppliers
Information on the Company's major customers
Total sales volume from top five customers (yuan) 567,585,617.15
Proportion of the total sales volume from top five customers to the annual sales volume 11.79%
Proportion of the related party total sales volume from top five customers to the annual sales volume 3.72%
Proportion to the annual
No. Name of customer Sales volume (yuan)
sales volume
1 Customer 1 179,269,129.59 3.72%
2 Customer 2 109,987,746.81 2.28%
3 Customer 3 101,383,384.54 2.11%
4 Customer 4 92,244,220.11 1.92%
5 Customer 5 84,701,136.10 1.76%
Total —— 567,585,617.15 11.79%
Information on the Company's top five customers
Among the top five customers mentioned above, Customer 1 is related to the Company.
Information on the Company's major suppliers
Total purchase volume from top five suppliers (yuan) 432,966,587.81
Proportion of the total purchase volume from top five suppliers to the annual purchases volume 11.09%
Proportion of the related party total purchase volume from top five suppliers to the annual purchases volume 1.89%
14
Information on the Company's top five suppliers
Purchase Proportion to the annual
No. Name of supplier
volume (yuan) purchase volume
1 Supplier 1 175,787,633.82 4.50%
2 Supplier 2 73,737,385.70 1.84%
3 Supplier 3 72,015,342.76 1.22%
4 Supplier 4 63,809,032.17 1.89%
5 Supplier 5 47,617,193.35 1.63%
Total —— 432,966,587.81 11.09%
Among the top five suppliers mentioned above, Supplier 4 had an associated relationship with the Company.
3. Expenses
Increase/decrease of gross
2023 2022 Explain for major changes
profit on a year-on-year basis
Selling expenses 233,862,026.48 153,735,714.96 52.12%
Due to changes in the scope of
Administrative
245,326,181.11 186,378,204.50 31.63% consolidation, there have been
expenses
significant year-on-year changes in
Financial expenses 30,158,077.47 11,825,523.03 155.03%
relevant data.
R&D expenses 164,185,717.71 76,792,805.69 113.80%
4. R&D expenditure
Information on R&D expenditure
Increase/decrease on a year-on-year
2023 2022
basis
The quantity of the person engaged in R&D 560 504 11.11%
The quantity proportion of the person engaged in R&D 12.95% 14.18% Decrease 1.23 percentage points
The spending amount on R&D（yuan） 164,185,717.71 76,792,805.69 113.80%
R&D spending accounts for the proportion of revenue 3.41% 2.65% Increase 0.76 percentage points
The amount of R&D investment capitalization（yuan） 0.00 0.00 0.00%
Capitalize R&D investment for the proportion of R&D
0.00% 0.00% 0.00%
spending
Reasons for the remarkable change in R&D spending accounts for the proportion of revenue compared with the
previous year
√ Applicable □Not applicable
The Company completed the acquisition of Sonyo Compressors and Sonyo Refrigeration System in November
2022, and completed the acquisition of Sonyo Refrigeration in June 2023. Due to changes in the scope of
consolidation, there have been significant year-on-year changes in relevant data.
Reasons for the substantial changes in the capitalization rate of R&D investment and its rationality
□ Applicable √ Not applicable
5. Cash flows
Year-on-year
Item 2023 2022
increase/decrease
Sub-total of cash inflows from operating activities 4,269,130,191.69 2,419,852,020.16 76.42%
Sub-total of cash outflows from operating activities 4,293,570,859.43 2,476,099,319.52 73.40%
Net amount of cash flow generated in operating
-24,440,667.74 -56,247,299.36 56.55%
activities
Sub-total of cash inflows from investing activities 46,010,527.14 419,938,843.20 -89.04%
15
Sub-total of cash outflows from investing activities 269,378,896.52 452,538,330.23 -40.47%
Net amount of cash flow generated in investing
-223,368,369.38 -32,599,487.03 -585.19%
activities
Sub-total of cash inflows from financing activities 451,319,569.70 871,841,047.27 -48.23%
Sub-total of cash outflows from financing activities 454,362,447.06 301,774,629.30 50.56%
Net amount of cash flow generated in financing
-3,042,877.36 570,066,417.97 -100.53%
activities
Net increase in cash and cash equivalents -251,221,467.19 482,692,465.30 -152.05%
Reason for change in the related data by 30% or higher on a year-on-year basis
√ Applicable □ Not applicable
1. The net cash flow generated from operating activities has significantly increased year-on-year, mainly due to an
increase in sales orders and an improvement in payment collection.
2. The net cash flow from investment activities decreased significantly year on year, mainly due to the impact of
more cash received from investment income in the same period last year and the transfer of Sonyo Compressor
into the subsidiary's fixed assets investment in the current period.
3. The net cash flow generated from financing activities decreased significantly year-on-year, mainly due to the
acquisition of large bank merger and acquisition loans in the same period last year.
Reason for remarkable difference between the cash flows from the Company's operating activities in the reporting
period and the net annual profit.
□Applicable √ Not applicable
V. Analysis of the non-main business
□ Applicable √ Not applicable
VI. Analysis of assets & liabilities
1. Remarkable change in assets
Monetary unit: RMB yuan
2023.12.31 2022.12.31
Explain for
Proportion to Proportion to Proportion increase/decrease
Amount Amount major changes
the total assets the total assets
Monetary funds 951,039,570.11 11.65% 1,006,165,899.18 13.24% Decrease 1.59 percentage points
Accounts receivable 1,576,433,924.16 19.31% 1,409,978,442.95 18.55% Increase 0.76 percentage points
Contract assets 237,076,878.71 2.90% 225,790,875.78 2.97% Decrease 0.07 percentage points
Inventories 1,638,139,479.14 20.07% 1,395,344,780.24 18.36% Increase 1.71 percentage points
Investment property 123,589,681.50 1.51% 115,332,918.20 1.52% Decrease 0.01 percentage points
Long-term equity
521,274,947.50 6.39% 562,987,771.94 7.41% Decrease 1.02 percentage points
investment
Fixed assets 1,291,851,402.46 15.83% 1,229,029,368.93 16.17% Decrease 0.34 percentage points
Construction in
114,801,351.21 1.41% 115,577,902.54 1.52% Decrease 0.11 percentage points
progress
Use right assets 30,548,057.08 0.37% 30,941,662.26 0.41% Decrease 0.04 percentage points
Short-term loans 262,287,784.38 3.21% 274,052,990.15 3.61% Decrease 0.40 percentage points
Contract liabilities 787,685,294.53 9.65% 647,645,820.57 8.52% Increase 1.13 percentage points
Long-term loans 679,700,000.00 8.33% 715,100,000.00 9.41% Decrease 1.08 percentage points
Lease liabilities 24,134,986.97 0.30% 11,230,532.05 0.15% Increase 0.15 percentage points
2. Assets & liabilities which are measured by fair value
√ Applicable □ Not applicable
Other non-current financial asset measured in fair value is 149,950,861.31 yuan at the year beginning，and
164,024,771.63 yuan at the year end.
Restrictions on asset rights as of the end of the reporting period
By the end of reporting period, the Company’s asset rights 351,238,387.77 yuan was limited, the reason for the
limitation: the deposit and the bank account were frozen; bank pledge; mortgage.
16
VII. Analysis of investments
1.The overall situation
√ Applicable □ Not applicable
Investment in 2023(yuan) Investment in 2022(yuan) Amount of variation
521,274,947.50 562,987,771.94 -7.41%
2.The significant equity investment during the reporting period
□Applicable √Not applicable
3 The significant non-equity investment during the reporting period
□Applicable √Not applicable
4.The financial asset investment
(1) The securities investment
√ Applicable □ Not applicable
Accumula
Account
Changes in the tive
Initial ing
Stock Stock Book value at the profit and loss of change of Current sale Report period Book value in the Accounting Source
investment measure
code abbreviation beginning the fair value in fair value amount profit and loss ending subjects of funds
cost ment
this period credited to
model
equity
fair Other
value Non-current Own
601211 Guotai Jun’an 10,910,008.00 148,267,008.72 14,073,910.32 0.00 0.00 19,856,214.56 162,340,919.04
measure financial funds
ment assets
total 10,910,008.00 -- 148,267,008.72 14,073,910.32 0.00 0.00 19,856,214.56 162,340,919.04 --
Until 31 December, 2023, the Company held 10,910,008 numbers of shares of Guotai Jun’an Securities Co., Ltd..
(2) Derivative investment
□Applicable √ Not applicable
During the reporting period, the Company does not exist derivative investment.
5. The use of funds raised
□Applicable √ Not applicable
VIII. The material assets and equity sale
1. The material assets sale
□Applicable √Not applicable
2. The material equity sale
□Applicable √Not applicable
IX. Analysis of major subsidiary companies and mutual shareholding companies
√ Applicable □ Not applicable
Unit: ten thousand yuan (except for registered capital)
17
Operating
registered Net profit
Company name Type The main business total assets net assets income
capital
Vending machine
development,
manufacturing,
mutual
sales, installation, JPY 4,000
Fuji Bingshan shareholding 47,017 13,752 20,985 -8,568
maintenance and million
company
related consulting
and after-sales
service
New building
mutual
Jingxue energy-saving RMB 108
shareholding 181,548 83,170 115,210 3,802
Insulation board, refrigerated million
company
storage door
High-grade
mutual
building hardware, USD 18,064.5
Bingshan Metal shareholding 37,256 31,425 46,488 6,373
plumbing thousand
company
equipment
Manufacture and
RMB
Sonyo sales of gas
subsidiary 442.3967milli 176,400 116,224 133,019 11,743
Compressor compression
on
machinery
Subsidiary companies obtained or disposed in the reporting period
√Applicable □Not applicable
The entity included in the consolidated financial statements this year has increased by one compared to the
previous year. During the reporting period, the Company acquired 40% equity of Panasonic Refrigeration (Dalian)
Co., Ltd. ("Panasonic Refrigeration") held by Panasonic Electric (China) Co., Ltd; Acquired 60% equity of
Panasonic Refrigeration held by Sanyo Electric Co., Ltd. After the completion of the equity transfer, the Company
holds 100% equity of Panasonic Refrigeration and is included in the scope of consolidation.
X. The structured corporate bodies which the Company controlled
□Applicable √Not applicable
XI. Development prospect of the Company
Major risks faced and countermeasures adopted by the Company
(1)Increasing market competition risk
Countermeasures: focus on the hot and cold industry, deeply cultivate the market segmentation; rapidly improve
the engineering and manufacturing power; orderly improve the level of intelligent manufacturing and
service-oriented manufacturing; speed up the transformation and upgrading of inherent undertakings; accelerate
the implementation of new kinetic energy cultivation; continue to build Bingshan enterprise and interest
community.
(2)Risk of slow marketing of new products and technologies
Countermeasures: create differentiated competitiveness of new products and technologies; strengthen the
technology marketing and service marketing, and cultivate the market segmentation professionally; appropriate
18
use of financial leasing, contract energy management and other innovative models.
(3)Risk of high level of trade receivables
Countermeasures: strictly implement the project management system and further strengthen the management of
accounts receivable; enhance quality of contract through intensified customer credit assessment and contract
appraisal; effective control of increase in trade receivables by reduction of guarantee deposits, and taking bank
credit instruments as guarantee deposits; improve contract execution through stricter review on goods delivery,
intensified control on project construction and acceptance, and post-sale service; prepare special composition
solutions and incentive policy to accelerate settlement of trade receivables with relatively long aging.
In 2024, the Company will focus on cold and hot business, further develop cold chain logistics, petrochemical
industry, ship refrigeration, ice and snow venues, CCUS, energy storage and heat management and other market
segments, solidly improve core competitiveness, effectively expand industry influence, continue to strengthen
main business, and strive to achieve rapid growth.
In 2024, the main business strategies are as follows:
(1) Sales force. Strengthen marketing planning and optimize incentive allocation. Consolidate traditional markets
and strengthen the exploration of new fields. Increase the proportion of self products and increase the gross profit
margin of the project.
(2) Product force. Guided by customer needs, accelerate the development of innovative products. Continuously
promote product standardization, serialization, and modularization. Integrate internal technical resources of the
Company and strengthen collaborative design and development.
(3) Technical force. Focusing on engineering technologies such as CO2 transcritical technology, environmental
simulation technology, cold and hot balance technology, and ultra-low charging system technology, we will
continue to optimize and improve them.
(4) Engineering force. Strengthen construction management to ensure project progress. Strengthen acceptance
management and promote orderly acceptance. Continuously carry out safety and quality improvement and
compliance inspections.
(5) Service force. Fully closed tracking and closed-loop management to improve customer satisfaction.
Continuously optimize business processes, improve service quality and efficiency.
The above-mentioned business plan does not represent the earnings forecast of the Company for the year of 2024.
Whether it can be achieved depends on the changes of market conditions and the efforts of management teams and
other factors. There are great uncertainties. Investors should pay special attention to it.
XII. Record of investigation, communication, and other activities in the reporting period
√Applicable □Not applicable
For details, please see
http://irm.cninfo.com.cn/ircs/company/companyDetail?stockcode=000530&orgId=gssz0000530
19
Section 4 Corporate governance
I. Basic situation of corporate governance
Within the reporting period, the Company centered around the operation subject as “Leading innovation, Creating
value” with the theme " integrity, innovation and return of the king"”, relying on the opportunity of overall
relocation and transformation of the Company, to further deepen and perfect the normative internal control system
and upgrade the governing level of the Company continuously.
There were no problems with the Company concerning horizontal competition caused by restructures and other
reasons. The main normal associated transactions between the Company and the associated companies included
purchasing the supporting products for package projects from the associated companies, and selling the supporting
parts and components to the associated companies and providing them with the labor service. Associated
transactions between the Company and the associated companies are necessary for normal production and
operation and helpful for the Company’s healthy development, and therefore will continue. The Company will
strictly follow the related decision-making procedures and fulfill the obligation in information disclosure in order
to further regulate associated transactions.
Was there any deviation of the Company's corporate governance from the requirements in the Company Law and
China Securities Regulatory Commission's regulations?
□ Yes √ No
There was no deviation of the Company's corporate governance from the requirements in the Company Law and
China Securities Regulatory Commission's regulations.
II. Status of the Company's business, staff, asset, organization and finance separations from
the holding shareholder
The Company was separated from the holding shareholder in business, staff, asset, organization and finance, and
has the independent and complete business and operation capability.
III. Horizontal competitions
□ Applicable √ Not applicable
IV Shareholders’ general meeting convened in the reporting period
1. Annual Shareholders’ general meeting within this reporting period
The proportion of
Session number of meeting The type of the meeting participate date Disclosing date Disclosing index
investors
2022 Annual Shareholders’ general http://www.cnin
29.44% May 25, 2023 May 26, 2023
Annual Shareholders’ General Meeting meeting fo.com.cn
V. Information on the Company’s Directors, Supervisors, Senior Management and Staff
1. basic information
Shares Increase on Decrease in
Shares held
Starting Ending held at holding of holding of
Office-hol at the end of
Name Position Sex Age date of date of beginning shares in this shares in this
ding state period
office term office term of period period period
(shares)
(shares) (shares) (share)
Ji Zhijian Chairman Incumbent M 56 Mar.27, Jan.11, 1,528,830 0 0 1,528,830
20
2014 2025
Jan.12, Jan.11,
Fan Wen Director Incumbent M 59 7,770 0 0 7,770
2022 2025
leave Jan.12, Apr.9,
Yin Xide Vice Chairman M 52 90,080 0 0 90,080
office 2022 2024
Jan.12, Jan.11,
Song Wenbao Director Incumbent M 50 593,880 0 0 593,880
2022 2025
leave Jan.12, Apr.9,
Dono Shigeru Director M 62 0 0 0 0
office 2022 2024
Nishimoto Director Incumbent M Jun.5, Jan.11,
57 0 0 0 0
Shigeyuki 2019 2025
M May.14, Jan.11,
Zhai Yunling Independent director Incumbent 60 0 0 0 0
2021 2025
May.14, Jan.11,
Liu Yuanyuan Independent director Incumbent F 49 0 0 0 0
2021 2025
Incumbent F May.14, Jan.11,
Yao Hong Independent director 50 0 0 0 0
2021 2025
Chairman of the board Jan.17, Jan.11,
Hu Xitang Incumbent M 56 0 0 0 0
of Supervisors 2019 2025
Jan.21, Jan.11,
Dai Yuling Supervisor Incumbent F 46 0 0 0 0
2016 2025
May.15, Jan.11,
Li Sheng Supervisor Incumbent M 44 0 0 0 0
2020 2025
Jan.1, Jan.11,
Cai Liyong General manager Incumbent M 50 0 0 0 0
2024 2025
Deputy general Jan.12, Jan.11,
Lu Jun Incumbent M 58 2,500 0 0 2,500
manager 2022 2025
Deputy general Jan.12, Jan.11,
Yang Fuhua Incumbent M 52 0 0 0 0
manager 2022 2025
Chief Financial May.14, Jan.11,
Wang Jinxiu Incumbent F 53 5,000 0 0 5,000
Officer 2021 2025
Feb.5, Jan.11,
Song Wenbao Board secretary Incumbent M 50 - - - -
2013 2025
leave Jan.1, Jan.1,
Yin Xide General manager M 52 - - - -
office 2021 2024
Total 2,228,060 0 0 2,228,060
During the reporting period, whether any directors or supervisors leave office or senior
managers are dismissed
√Applicable □Not applicable
The Company held the 18th meeting of the 9th Board of Directors on November 23, 2023, and approved the report
on the dismissal and appointment of the Company's General Manager. Dismiss Mr. Yin Xide from his position as
General Manager of the Company according to the development needs of the Company; Upon nomination by the
Chairman of the Company, Mr. Cai Liyong has been appointed as the General Manager of the Company. His
official dismissal and appointment date is January 1, 2024, and his term of office expires on the expiration of the
21
9th Board of Directors of the Company.
Changes of directors, supervisors, senior managers of the Company
Name Position held Type Date Reason
Yin Xide General Manager Dismissal Jan 1,2024 Company development needs
Cai Liyong General Manager Appointment Jan 1,2024 Company development needs
Yin Xide Vice Chairman Leave office Apr 9,2024 Resignation due to job changes
Dono Shigeru Director Leave office Apr 9,2024 Resignation due to job changes
Office holding
Professional background, main work experiences and the main duties and responsibilities of incumbent directors,
supervisors, senior managers of the Company
main duties and
Name Position held Professional background Main work experience
responsibilities
doctorate degree in
Successively acting as GM, Chairman of Panasonic Cold-Chain.; Related
management of the
Ji Zhijian Chairman Chairman and President of Dalian Bingshan Group Co., Ltd.; responsibilities of
Dalian University of
Chairman of the Company. the Chairman
Technology
served as vice Minister of Import and Export Department and
Related
Minister of Import and Export Department of the Company; Assistant
Fan Wen Director Graduate degree responsibilities of
general Manager and Vice President of DalianBingshan Group Co.,
the Director
LTD.; Director of Jiangsu JingXue Insulation Technology Co.,Ltd.
Director and Related
graduate from Zhejiang Successively acting as representative for securities affairs, board
Song Wenbao Board responsibilities of
University，CFA secretary of the Company.
Secretary Board Secretary
served as the director of Financial Planning Room and Finance
Department System Overall Room of Panasonic Corporation Related
Nishimoto graduated from Meiji
Director Headquarter; the director of Regional Financial Integration Room, responsibilities of
Shigeyuki university
CFO of Panasonic Corporation China & Northeast Asia Company; the the Director
supervisor of Dalian Bingshan Group Co., LTD.
Professor of Law School of Dalian Maritime University, lawyer of Related
Independent Doctor of Law, Beijing Jincheng Tongda (Dalian) Law Firm, legal adviser of Dalian responsibilities of
Zhai Yunling
director professor, lawyer Municipal People's Government, member/arbitrator of Dalian the Independent
Arbitration Commission director
Professor of Accounting School of Dongbei University of Finance
and Economics, Director of Sino-German Management Control Related
Independent Research Center, independent director of China Railway Tielong responsibilities of
Liu Yuanyuan Doctor of Accounting
director Container Logistics Co., LTD.,; independent director of Bank of the Independent
Dalian Co., LTD.; independent director of Kincai (Liaoning) Life director
Science and Technology Co., LTD.
Yao Hong Independent graduate from China Doctor of Management, School of Economics and Management, Related
22
director University of Political Dalian University of Technology, Independent director of Shanghai responsibilities of
Science and Law， Binku Network Technology Co., LTD., Independent director of Hualu the Independent
professor of law Zhida Technology Co., LTD., Independent director of Harbin Hattou director
Investment Co., LTD., Independent director of Fushun Special Steel
Co., Ltd.
Chairman of graduated from Nanjing Related
Hu Xitang Board of University of Science served as the chairman of the labor union of the Company. responsibilities of
Supervisors and Technology the Supervisor
Related
acting as the chief of the Financial Dept. of Dalian Bingshan Group
Dai Yuling Supervisor Senior Accountant responsibilities of
Company Ltd.
the Supervisor
graduated from Dalian acting as the Director of Operation Management Department of Related
Li Sheng Supervisor University of Dalian Bingshan Group Company Ltd；chief of the Financial Dept. of responsibilities of
Technology the Company. the Supervisor
Heilongjiang University
served as the General Manager of Dalian Bingshan Ryosetsu Quick
of Commerce (now
Freezing Equipment Co., Ltd., the General Manager of Wuhan New Related
renamed Harbin
Cai Liyong GM World Refrigeration Industry Co., Ltd., and the General Manager of responsibilities of
University of
Bingshan Sonyo Refrigeration (Dalian) Co., Ltd. Starting from January GM
Commerce) majoring in
1, 2024, appointed as the General Manager of the Company.
refrigeration and freezing
served as designer and vice minister of the Company; general Manager
graduated from Jilin
of Dalian Bingshan Air-conditioning Equipment Co., Ltd; the Deputy Related
University of
Lu Jun DGM General Manager of Dalian Bingshan Group Engineering Co., LTD. ; responsibilities of
Technology, Graduate
the assistant to the general Manager and head of the Operation and DGM
degree, Senior Engineer.
Management Department of the Company.
served as engineer, deputy director and director of complete set
graduated from Xi 'an design Department of the Company; served as deputy General Related
Yang Fuhua DGM Jiaotong University, Manager of Dalian Bingshan Group Engineering Co., LTD; served as responsibilities of
Senior Engineer chief engineer of the Company's business Headquarters and deputy DGM
Head of the Research and development Headquarters.
served as cost accountant in finance Department of the Company and
Minister of Finance Department of DalianBingshan Air Conditioning Related
Wang Jinxiu CFO Senior accountant Equipment Co., LTD.; served as the Director of the Financial responsibilities of
Management Department of the Company. served as Chief Financial CFO
Officer since May 2021.
Office holding in shareholder unit
√ Applicable □ Not applicable
If receiving remuneration or allowance from
Name of office holder Shareholder unit name Position held in shareholder unit
shareholder unit
Ji Zhijian Dalian Bingshan Group Co., Ltd. Chairman of the Board, President Yes
Fan Wen Dalian Bingshan Group Co., Ltd. Vice President Yes
23
Office holding in other units
√ Applicable □ Not applicable
If receiving
remuneration or
name unit name Position held in other unit
allowance from other
unit
Dalian Zhong Huida Refrigeration Technology Co., Ltd. Chairman No
Ji Zhijian
Linde Engineering (Dalian) Co., Ltd. Chairman No
Sonyo Compressor (Dalian) Co., Ltd. Chairman No
Dalian Bingshan Air-Conditioning Equipment Co., Ltd Chairman No
Dalian Niweisi LengNuan Technology Co., Ltd Chairman No
Fan Wen
Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd Chairman No
MHI Bingshan Refrigeration (Dalian) Co., Ltd. Chairman No
Dalian Bingshan Engineering & Trading Co., Ltd. Chairman No
Wuhan New World Refrigeration Industrial Co., Ltd. Chairman No
Sonyo Refrigeration (Dalian) Co., Ltd. Chairman No
Cai Liyong
Sonyo Refrigeration System (Dalian) Co., Ltd. Chairman No
Dalian Bingshan Group Construction Co., Ltd Chairman No
China Railway Tielong Container Logistics Co., LTD. Independent director Yes
Liu Yuanyuan
Kincai (Liaoning) Life Science and Technology Co., LTD. Independent director Yes
Harbin Hattou Investment Co., LTD. Independent director Yes
Yao Hong
Fushun Special Steel Co. LTD Independent director Yes
3. Remuneration paid to directors, supervisors, and senior management
Decision-making procedure, decision-making basis and actual payment of remuneration for directors, supervisors
and senior management
Decision-making procedure: the Company's remuneration plan for directors and supervisors was proposed by the
Company's Remuneration and Evaluation Committee of the Board of Directors, and after approval by the Board
of Directors, submitted to the general meeting for adoption and put into effect. The Company’s remuneration plan
for senior management was put into effect after approval by the Company’s Board of Directors.
Decision-making basis: it was decided on the basis of main responsibilities and importance of the concerned
position and the remuneration level of similar positions in other similar enterprises and evaluated and rewarded
through the Company’s examination procedure for assets operation performance.
The total amount of remunerations actually ( pre-tax ) paid by the Company to directors, supervisors, and senior
management was 5,033,700 yuan.
Particulars about the annual remuneration of directors, supervisors and senior staff members
Annual remuneration and allowance( pre-tax )paid by the Company
Name
(ten thousand yuan)
Ji Zhijian 0
Yin Xide 107.88
Yokoo Sadaaki 0
Nishimoto Shigeyuki 0
Song Wenbao 64.73
Zhai Yunling 8
Liu Yuanyuan 8
Yao Hong 8
24
Hu Xitang 80.34
Dai Yuling 0
Li Sheng 35.61
Lu Jun 64.27
Yang Fuhua 63.53
Wang Jinxiu 63.01
Total 503.37
VI. Performance of directors' duties during the reporting period
1.The situation of the board of Directors during this reporting period
The meeting time Date of meeting Date of disclosure The meeting resolution
13th Meeting of 9th Session of the Board April 25,2023 April 26,2023 http://www.cninfo.com.cn
14th Meeting of 9th Session of the Board May 4,2023 May 5,2023 http://www.cninfo.com.cn
15th Meeting of 9th Session of the Board June 27,2023 June 28,2023 http://www.cninfo.com.cn
16th Meeting of 9th Session of the Board August 25,2023 August 26,2023 http://www.cninfo.com.cn
17th Meeting of 9th Session of the Board October 26,2023 October 27,2023 http://www.cninfo.com.cn
18th Meeting of 9th Session of the Board November 23,2023 November 24,2023 http://www.cninfo.com.cn
2. Attendance of directors at the board of directors and general meetings of shareholders
During the reporting period, all directors were present in person at all board meetings where they were required to
be present.
3.Objections raised by directors to matters related to the company
□ Applicable √ Not applicable
4. Other instructions for the performance of directors' duties
□ Applicable √ Not applicable
VII. Execution of duties of the special committees under the Board of Directors in the
reporting period
The audit committee under the Board of Directors of the Company performs its duties in accordance with the
detailed rules for the implementation of the audit committee under the Board of Directors and the working
procedures for the annual report of the audit committee, supervises the Company's internal audit system and its
implementation, reviews the Company's financial information and its disclosure, and evaluates the work of
external audit institutions.
In the evaluation of the Company's internal control, the audit committee actively plays its responsibilities of
organization, leadership and supervision. According to the identification standard of internal control defects of the
Company, the annual internal control evaluation report of the Company was reviewed, and ShineWing Certified
Public Accountants was entrusted to conduct internal control audit. It is considered that the current situation of the
Company's internal control system meets the relevant requirements and has been well implemented. The annual
internal control evaluation report of the Company truthfully reflects the above facts.
During the annual audit of the company, the audit committee actively communicated and effectively coordinated
with the audit institution ShineWing certified public accountants. Before and after the audit, we have repeatedly
urged the audit institutions to promote the audit work with quality and quantity on the audit work plan and work
progress. After the completion of the audit, the annual financial report and annual report of the company were
carefully reviewed, and it was considered that the financial report of the company was comprehensive and true,
and the financial report and other information disclosed by the company were objective and true, which truly
25
reflected the annual financial situation of the company.
The Audit Committee believes that ShineWing Certified Public Accountants can abide by the independent,
objective and fair practice standards in providing annual audit services for the Company, audit the Company in
strict accordance with the new accounting standards, actively communicate with the audit committee and
independent directors, be diligent and responsible, and better complete the annual audit of the Company.
The remuneration and assessment committee under the Board of Directors of the Company performed its duties in
accordance with the implementation rules of the remuneration and assessment committee of the Board of
Directors of the Company, and reviewed the annual remuneration of the directors, supervisors and senior
managers of the Company.
VIII. Work of the Board of Supervisors
Was there any risk with the Company found by the Board of Supervisors in their supervision activities in the
reporting period?
□ Applicable √ Not applicable
The Board of Supervisors had no objections to the matters under supervision in the reporting period.
IX Status of the Company's staff
1. As of Dec. 31, 2023 the Company and its subsidiary had 4,323 enrolled employees, including 2,451 persons
engaged in production; 567 persons engaged in marketing; 560 persons engaged in engineering and technology;
78 persons engaged in financing; and 667 persons engaged in management.
2. As of Dec. 31, 2023, among enrolled employees of the Company and its subsidiary, 145 persons have the
educational background of Master or higher; 1,336 persons have the educational background of university; 1,332
persons have the educational background of junior college; and 1,510 persons have the educational background of
secondary technical school or lower.
3. The Company applied the employee job performance wage system with distribution according to positions and
performance of an employee.
4. The Company formulated the annual training plan and gave purposeful training to an employee in consideration
of his/her post requirement.
5. Labor outsourcing
□ Applicable √ Not applicable
X. Profit distribution and dividend payment
By giving consideration to both the return to shareholders and the Company's long-term development, and in
combination of the Company's profit made in this year, the Company formulated the 2021 annual dividend
distribution plan of paying the cash of 0.1 yuan for every 10 shares. Reviewed and adopted at the Company's
general meeting, the Company's Board of Directors has implemented the plan in July 2023.
Formulation and implementation of the Company's cash dividend distribution policy in the reporting period
complied with the Company's Articles of Association and the general meeting's resolution, and the dividend
distribution standard and proportion were defined and clear and the applicable decision-making procedure and
system were complete. The independent directors agreed on it and the legal rights and interests of minority
shareholders were well protected.
Special notes to cash dividend payout policy
If the regulations of the Articles of Association or the requirements of the shareholders of
Yes
the company meeting are met:
If the dividend payout standard and proportion is definite and clear-cut: Yes
If relevant decision-making procedure and mechanism is complete: Yes
If the independent directors have performed their duties and played their due role: Yes
If small and medium shareholders have the opportunity to sufficiently express their
Yes
opinions and appeals and if their legal rights and interests are sufficiently protected:
If the condition and procedure for adjusting or changing the cash dividend payout policy
Yes
is compliant and transparent:
The Company made profit in the reporting period and the undistributed profit of the parent company was positive
26
but no cash dividend distribution plan was proposed.
□ Applicable √ Not applicable
Profit distribution preplan, and preplan of share-granting with capital accumulation fund of the Company
Bonus shares to be presented for every 10 shares (shares) 0
Dividend to be distributed for every 10 shares (RMB yuan) (including tax) 0.3
Equity base for distribution preplan (shares) 843,212,507
Total amount of cash dividend distribution (RMB yuan) (including tax) 25,296,375.21
Profit distributable to the shareholders in the current year 1,022,296,513.94
Proportion of cash dividend distribution accounting for total profit distribution 100%
Cash dividend distribution policy:
When the development stage of the company belongs to a growth period with important fund disbursement arrangement(s), the
proportion of cash dividend distribution accounting for this profit distribution should reach 20% at minimum when conducting profit
distribution.
Notes to details about preplan for profit distribution or capital stock increase with capital reserve
According to the audit by ShineWing CPAs (Special General Partnership), the net profit made by the parent company of the Company
in 2023 was RMB 104.265 million and 10% of the net profit(RMB 10.426 million) was drawn as the legal surplus reserve. Therefore,
the profit distributable to the shareholders in the current year was RMB 93.839 million.
Plus the initial undistributed profit of RMB 936.889 million and minus the dividend of RMB 8.432 million of common shares paid in
2022,the accumulated profit distributable to the shareholders was RMB1, 022.296 million.
The Company’s profit distribution preplan for 2023:
Based on the net profit made by the parent Company of the Company in 2023 (104.265 million), 20% of the net profit (RMB 20.853
million) will be drawn as the free surplus reserve; Based on the total capital stock of 843,212,507 shares, the dividend of RMB 0.3 in
cash (including tax) will be distributed for every 10 shares, the total cash dividend is RMB 25.296 million, and the cash dividend for
B share is converted and paid in Hong Kong dollars.
The above preplan shall be submitted to the 2023 shareholders’ general meeting for review and approval.
XI．The implementation and effect of equity incentive
□ Applicable √ Not applicable
XII．Internal control system construction and implementation during the reporting period
1. Internal control construction and implementation
During the reporting period, the Company made positive innovation, took the initiative to change, and vigorously
promoted organizational strengthening. Implement market-centered integrated operation through organizational
restructuring, business process reengineering and management system revision. Through the project management
system, fully implement the project budget, control the whole process of operation, ensure profits and prevent
risks.
2. Details of material weakness in the internal control found in the reporting period described in the report
on self-evaluation of internal control.
□ Applicable √ Not applicable
There was no material weakness in the internal control found in the reporting period.
XIII．Management and control of subsidiaries during the reporting period
During the reporting period, the Company focused on strengthening the management control of subsidiaries from
the following aspects:
(1) The Company carefully identified, strictly managed and dynamically adjusted the directors, supervisors and
senior managers assigned to subsidiaries;
(2) The Company participated in the whole process of the preparation of the annual business plan of its
subsidiaries, made reasonable suggestions and gave appropriate guidance;
(3) The Company conducted monthly/quarterly tracking and annual assessment on the implementation of business
27
plans and compliance operations of subsidiaries.
During the reporting period, in order to further strengthen the main business of cooling and heating, the Company
acquired 100% equity of Panasonic Refrigeration after a major asset restructuring in 2022. The integration plan
for the aforementioned restructuring in terms of business, assets, finance, personnel, institutions, etc. is detailed in
the Company's "Draft Report on Major Asset Purchase and Related Party Transactions (Revised Draft)". The
relevant integration plan is being implemented in an orderly manner.
XIV．Report on self-evaluation of internal control or internal control audit report
1. Report on self-evaluation of internal control
Details of material weakness in the internal control found in the reporting period described in the report on
self-evaluation of internal control
There was no material weakness in the internal control found in the reporting period.
Date of disclosing the full text of the report on
Apr.26, 2024
self-evaluation of internal control
Disclosure reference to the full text of the For the 2023 annual report on self-evaluation of internal control
report on self-evaluation of internal control of the Company, visit the website www.cninfo.com.cn.
2. Internal control audit report
Description of the deliberation opinions in the internal control audit report
We think that as of Dec. 31, 2023, Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. had
maintained an effective internal control over the financial reports in all material aspects according to Basic
Enterprise Internal Control Specification and relevant regulations.
Date of disclosing the full text of
Apr. 26, 2024
the internal control audit report
Disclosure reference to the full text For the 2023 annual internal control audit report of the Company, visit the
of the internal control audit report website www.cninfo.com.cn.
Did the accounting firm issue the internal control audit report with nonstandard opinions?
□ Applicable √ Not applicable
Was the internal control audit report issued by the accounting firm consistent with the opinion in the
self-evaluation report of the Board of Directors?
√Yes □ No
XV. Rectification of problems in self inspection of special actions for governance of listed
companies
None
28
Section 5 Environmental and social responsibility
I．Major environmental issues
The listed company and its subsidiaries whether belong to heavy pollution industry formulated by the state
environmental protection department
√Yes □ No
Bingshan Sonyo Compressor (Dalian) Co., Ltd., and Wuhan New World Refrigeration Industry Co., Ltd,
subsidiaries of the Company, are key pollutant discharge units announced by the environmental protection
department.
Administrative penalties imposed for environmental problems during the reporting period
□Yes √ No
II．Social responsibilities
The specific content of the Company's performance of social responsibility can be found in the Social
Responsibility Report disclosed on Juchao information website on April 26, 2024.
III. We consolidated and expanded our achievements in poverty alleviation and rural revitalization
In 2023, the Company continued to consolidate and expand the achievements of poverty alleviation and rural
revitalization, and invested 60,000 yuan in the construction of a rural street lighting project to connect and
communicate with Songlin Village, Guangming Mountain Town, Zhuanghe City. The Company also carried out
daily maintenance of the air conditioning equipment in the village cultural activity center. In addition, the Dalian
Jinpu New Area Bingshan Hope Middle School and Bingshan Hope Book Corner, jointly funded by the Company
and investing enterprises with 250,000 yuan, were unveiled on December 28, 2023.
29
Section 6 Important items
I Implementation of commitments
1. Commitments of the Company or its shareholders holding 5% or higher of the shares in the reporting
period or carried to the reporting period
√Applicable □Not applicable
According to the relevant provisions of the "Self regulatory Guidelines for Listed Companies on the Shenzhen
Stock Exchange No. 8- Major Asset Restructuring", the important commitments and performance made by
relevant parties during the 2022 major asset restructuring process of the Company are detailed in the Company's
announcement on the performance of commitments made by relevant parties during the major asset restructuring
disclosed on CNINFO on April 26, 2024.
2. The company's assets or projects have earnings forecasts, and the reporting period is still in the period of
earnings forecasts. The company explains the reasons why the assets or projects have reached the original
earnings forecasts.
□Applicable √Not applicable
II. Non-operation capital occupation by holding shareholders and their related parties in the
listed company
□Applicable √Not applicable
The Company had no capital occupation by the holding shareholders and their related parties in the listed
company within this reporting period.
III. Foreign guarantee in violation of regulations
□ Applicable √ Not applicable
IV. Explain to the “non standard audit report” last year from the board of directors of the
Company
□Applicable √Not applicable
V. Explain to the “non standard audit report” from the board of directors, board of
supervisors of the Company
□Applicable √Not applicable
VI. Change in accounting policies, accounting estimates and accounting methods or correction
of major accounting mistakes in the reporting period, which should be retroactively restated
compared with the financial statements of the previous year
√Applicable □Not applicable
On November 30, 2022, the Ministry of Finance issued Interpretation No. 16 of the Accounting Standards for
Enterprises, which stipulates that "deferred income tax related to assets and liabilities arising from individual
transactions shall not be subject to the accounting treatment of initial recognition exemption" and shall come into
effect from January 1, 2023.
Due to the release of the above accounting standards interpretation, the Company needs to make corresponding
changes to accounting policies and implement the above accounting standards from the effective date specified in
the above documents.
The Company implemented the relevant provisions of Accounting Standard Interpretation No. 16 from January 1,
2023, and made retrospective adjustments to the relevant items of the consolidated financial statements for the
year 2022.
VII. Change in the range of consolidated statements compared with the financial statements
of the previous year
√Applicable □Not applicable
The entity included in the consolidated financial statements this year has increased by one compared to the
previous year. During the reporting period, the Company acquired 40% equity of Panasonic Refrigeration (Dalian)
Co., Ltd. ("Panasonic Refrigeration") held by Panasonic Electric (China) Co., Ltd; Acquired 60% equity of
Panasonic Refrigeration held by Sanyo Electric Co., Ltd. After the completion of the equity transfer, the Company
holds 100% equity of Panasonic Refrigeration and is included in the scope of consolidation.
30
VIII. Engagement and dismissal of the accounting firm
Currently engaged accounting firm
Name of domestic accounting firm ShineWing CPAs (Special General Partnership)
Remuneration paid to the domestic accounting firm (in 10 thousand yuan) 107
Continuous audit service years of the domestic accounting firm 8
Name of certified public accountants with the domestic accounting firm Sui Guojun, Zhang Shizhuo
Continuous audit service years of the certified public accountants Sui Guojun 1 year, Zhang Shizhuo 3 years
If the CPA firm retaining was changed in this period
□Applicable √Not applicable
Employment of internal control audit accounting firm, financial advisor or sponsor
√ Applicable □ Not applicable
During the reporting period, the Company hired ShineWing CPAs (Special General Partnership) as the Company's
2023 audit institution to conduct an integrated audit of the Company's financial reports and internal control.
IX. Facing suspend and terminate listing after the annual report disclosure
□ Applicable √ Not applicable
X. Bankruptcy restructuring related matters
□ Applicable √ Not applicable
XI. Major lawsuit and arbitration issues
□ Applicable √ Not applicable
XII. Punishment and rectification
□ Applicable √ Not applicable
XIII．The credibility of companies and its controlling shareholder, actual controller
√ Applicable □ Not applicable
The controlling shareholder of the Company and the Company don’t exist situation such as unfulfilled the court’s
effective judgments or failed to pay duly a large amount of debt during the reporting period.
XIV．Important associated transactions
1. Related party transactions related to daily operations
During the reporting period, the total amount of normal associated transactions between the Company and
associated parties was 784.78 million yuan, accounting for 94.71% of the budgeted amount for the year 2023. This
included 207.66 million yuan, accounting for 80.64% of the budgeted amount for the year 2023, for purchasing
supporting products for package projects from associated parties, and 577.12 million yuan, accounting for
101.05% of the budgeted amount for the year 2023, from selling supporting parts and components to associated
parties.
Associated transactions related to purchases or sales of assets
□Applicable √ Not applicable
Important associated transactions with joint external investments
□ Applicable √ Not applicable
4. Associated transactions related to rights and debts
□ Applicable √ Not applicable
5. Associated transactions with related financial companies
□ Applicable √ Not applicable
6. The transactions between the financial company controlled by the company and its related parties
□ Applicable √ Not applicable
7. Other associated transactions
√ Applicable □ Not applicable
In order to strengthen business collaboration and provide more optimized solutions for energy conservation and
environmental protection for customers, the Company signed a conditional and effective equity transfer agreement
with Panasonic China and Sanyo Electric on May 4, 2023, acquiring 40% equity of Panasonic Refrigeration held
by Panasonic China and 60% equity of Panasonic Refrigeration held by Sanyo Electric. The equity transfer was
completed in June 2023, and the Company holds 100% equity in Panasonic Refrigeration.
31
XVII. Major contract and its performance
1. Hosting, contracting and leasing status
(1) the hosting status
□ Applicable √ Not applicable
(2)the contracting status
□ Applicable √ Not applicable
(3) the leasing status
√ Applicable □ Not applicable
The 13th meeting of the 7th board of directors of the Company was held on April 22, 2017, and approved to rent
out the old plant and land located in No 888, South West RD, Shahekou Districit, Dalian to Bingshan Wisdom.
The lease contract is from April 1, 2017 to December 31, 2036. The Company has signed the “estate leasing
contract” with Dalian Bingshan Wisdom based on the requirement of utilization of old land and plant and new
business foster plan. Current year’s lease premium is RMB 9.01 million.
On July 31, 2014, the Company and Lingzhong Bingshan Refrigeration (Dalian) Co., Ltd. signed a supplementary
agreement to modify the house lease contract, and rent out the Building No. 6 of Workshop No. 106, Liaohe East
Road, Dalian Development Zone, to Lingzhong Bingshan Refrigeration (Dalian) Co., Ltd.. The rental area is
15,259.04 square meters, and lease period will end on July 16, 2029, the annual rent is RMB 3.81 million.
2. Guaranteeing status
√Applicable □ Not applicable
China Development Fund provides support for the Company's cold chain green intelligent equipment and service
industrialization base project, and provides special funds to the controlling shareholder of the Company, Bingshan
Group. The above-mentioned special fund amount is 160 million yuan, with a term of 10 years and a rate of 1.2%.
After the above special funds are in place, Bingshan Group has fully allocated them to the Company in a one-time
manner without increasing the rate. The implementation of the above-mentioned special funds requires the
Company to provide guarantees and continue until the reporting period. This guarantee is in the form of a
guarantee for the controlling shareholder, but in fact, it is a guarantee for the Company to obtain financial support
for itself.
The Company provides guarantees for clients Guizhou Waterfall Cold Chain Food Investment Co., Ltd., Liuyang
Zhongjie Technology Investment Co., Ltd., Shandong Jiechuang Energy Technology Co., Ltd., and Shaanxi
Yiming Food Co., Ltd. based on financing leasing business, which will continue until the reporting period. In the
normal performance of the above-mentioned project, the guaranteed shareholder and relevant natural persons
provided the company with full joint and several liability guarantee and counter guarantee, and the overall
guarantee risk of the Company is controllable.
The Company provides guarantees to its client Jilin Fuyu Agricultural Technology Co., Ltd. based on financing
leasing business. The guarantor has good qualifications, and the guarantor's shareholders and related natural or
legal persons have provided the company with full joint liability guarantee and counter guarantee. The overall risk
of the Company's guarantee is controllable, and it has not harmed the legitimate rights and interests of the
company and small and medium-sized shareholders.
The above guarantee matters have been reviewed by the board of directors and are being fulfilled normally.
3. Entrust others to cash assets management
(1)Trust management
□Applicable √Not applicable
(2)Entrusted loans
□Applicable √Not applicable
(3)Other important contracts
□ Applicable √ Not applicable
32
XIX. Other important matters
□ Applicable √ Not applicable
XX. Other important matters of subsidiary company
□ Applicable √ Not applicable
33
Section 7 Change in Share Capital and Shareholders' Information
I. Change in share capital
1. Change in share capital
Shares Shares
（before change） （after change）
items
number proportion number proportion
I. Non-circulating share capital with restricted trade
1,670,894 0.20% 1,670,894 0.20%
conditions
II. Circulating share capital 841,541,613 99.80% 841,541,613 99.80%
1. Domestically listed ordinary shares 600,041,613 71.16% 600,041,613 71.16%
2. Domestically listed foreign shares 241,500,000 29.64% 241,500,000 29.64%
III. Total shares 843,212,507 100.00% 843,212,507 100.00%
Approval of changes in shares
□ Applicable √Not applicable
The restricted shares changes
□ Applicable √Not applicable
II. Securities issuance and listing
1. Securities issuance in the report period
□ Applicable √ Not applicable
2. Change in total shares of the Company and structure of shareholders
□ Applicable √ Not applicable
3. Internal staff shares
□ Applicable √ Not applicable
III. Shareholders and actual controller
1. Number of shareholders and their shareholding
Total number of shareholders in the Total number of shareholders as of the last month before
48,029 53,903
reporting period disclosure of the annual report
Shareholding of top ten shareholders
Number of Number of
Proporti shares with pledged
Name Nature Total number
on sale shares or
restriction shares frozen
Domestic non-state-owned
Dalian Bingshan Group Co., Ltd. 20.27% 170,916,934 0 0
legal person
Sanyo Electric Co., Ltd. Overseas legal person 8.72% 73,503,150 0 0
Everyone's Assets - Shengshi Selected No.2
Others 1.29% 10,847,212
Collective Asset Management Product (Phase 2)
Chen Xianlai Domestic natural person 0.87% 7,326,500
Lin Zhenming Foreign natural person 0.80% 6,730,000
Cao Yifan Domestic natural person 0.54% 4,529,700
J. P. Morgan Securities PLC－own funds Overseas legal person 0.52% 4,361,703
Zhang Sufen Domestic natural person 0.48% 4,020,000
34
Dongfanghong JD Big Data Flexible Allocation
Others 0.47% 4,000,017
Hybrid Securities Investment Fund
Xue Hong Domestic natural person 0.43% 3,640,000
Shareholding of top ten shareholders without sale restriction
Number of shares
Name Type of shares
without sale restriction
Dalian Bingshan Group Co., Ltd. 170,916,934 RMB denominated ordinary shares
Sanyo Electric Co., Ltd. 73,503,150 Domestically listed foreign shares
Everyone's Assets - Shengshi Selected No.2 Collective Asset
10,847,212 RMB denominated ordinary shares
Management Product (Phase 2)
Chen Xianlai 7,326,500 RMB denominated ordinary shares
Lin Zhenming 6,730,000 Domestically listed foreign shares
Cao Yifan 4,529,700 Domestically listed foreign shares
J. P. Morgan Securities PLC－own funds 4,361,703 RMB denominated ordinary shares
Zhang Sufen 4,020,000 RMB denominated ordinary shares
Dongfanghong JD Big Data Flexible Allocation Hybrid Securities
4,000,017 RMB denominated ordinary shares
Investment Fund
Xue Hong 3,640,000 Domestically listed foreign shares
Dalian Bingshan Group Co., Ltd. had the association
Notes to the associated relationship and uniform actions of the above relationship with Sanyo Electric Co., Ltd. among the above
shareholders shareholders. Sanyo Electric Co., Ltd. holds 26.6% of Dalian
Bingshan Group Co., Ltd.'s equity.
Explanation on the participation of the top 10 ordinary shareholders
None
in margin trading and securities lending business
2. Controlling shareholder of the Company
Legal Founding Unified social
Name of holding shareholder Main business
representative date credit code
Research, development, manufacture, sales,
service and installation of industrial refrigeration
products, freezing and cold storage products,
91210200241 large-, medium- and small-size air-conditioning
Dalian Bingshan Group Co., Ltd. Ji Zhijian Jul. 3, 1985
2917931 products, petrochemical equipment products,
electronic and electric control products, home
appliance products and environment protection
products.
Shares held by the holding
shareholder in other overseas and
domestic listed companies as the None
holding shareholder or ordinary
shareholder in the reporting period
Change in the holding shareholder in the reporting period
□ Applicable √ Not applicable
35
3. Actual controller of the Company
The company has no actual controller.
According to the actual situation of the Company and its controlling shareholder, and compared with the related
laws and regulations including Company Law of People’s Republic of China, Management Regulation on Listing
Company Acquisition and Stock Listing Rules of Shenzhen Stock Exchange, with the confirmation of Liaoning
Huaxia law firm, the Company released the Public Notice on Not Having Actual Controller.(No: 2015-025),)
which was published on B04 of China Securities, A19 of HK Commercial Daily and Cninfo website on April 24
2015.
Commission ofDalian Municipality Government
State-owned Assets Supervision and Administration
Dalian State-owned Assets Management Co., Ltd.
Dalian Equipment Manufacture Investment
Panasonic Corporation of China
Dalan Zhonghuida Refrigeration
Sanyo Electric Co., Ltd.
Dayang Co., Ltd.
Technology Co., Ltd.
Co., Ltd.
100% 100%
24.97% 8.28% 13.3% 20.2% 26.6% 6.65%
Dalian Bingshan Group Co., Ltd.
20.27%
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
The actual controller controlled the Company through a trust or other asset management
□ Applicable √ Not applicable
4. Other legal-person shareholders holding of 10% or more shares
□ Applicable √ Not applicable
5.、controlling shareholders, actual controllers, restructuring the constraint to the stake and other
commitments underweight
□ Applicable √ Not applicable
36
Section 8 Information on Preferred Stock
□ Applicable √ Not applicable
In the reporting period, the Company didn’t own preferred stock.
37
Section 9 Information on Corporate bonds
□ Applicable √ Not applicable
In the reporting period, the Company didn’t own corporate bonds.
38
Section 10 Financial Report
1. Opinion
We have audited the accompanying financial statements of Bingshan Refrigeration & Heat Transfer
Technologies Co., Ltd (“Bingshan Refrigeration & Heat Company”), which comprise the consolidated
and company balance sheets as at 31 December 2023, and the consolidated and company income
statements, the consolidated and company cash flow statements, the consolidated and company
statements of changes in equity for the year then ended, and notes to these financial statements.
In our opinion, the accompanying financial statements have been prepared in accordance with the
requirements of Accounting Standards for Business Enterprises, in all material respects and present fairly
the consolidated and the financial position of Bingshan Refrigeration & Heat Company as at 31
December 2023, and of their consolidated and the company’s financial performance and cash flows for
the year then ended.
2. Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing for Chinese Certified Public
Accountants. Our responsibilities under those standards are further described in the “Auditor’s
Responsibilities for the Audit of the Financial Statements” section of our report. We are independent of
Bingshan Refrigeration & Heat Company in accordance with the Code of Ethics for Chinese Certified
Public Accountants, and we have fulfilled our other ethical responsibilities of the code. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit.
3. Key Audit Matters
Key audit matters are those matters that we consider, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These matters were addressed
in the context of our audit of the financial statements as a whole and, in forming our audit opinion
thereon, and we do not express a separate opinion on these matters.
Revenue Recognition
Key Audit Matter How the matter was addressed in the audit
As stated in the Note ‘ No.44,VI. The main audit procedures carried out for addressing the key audit
Notes to Consolidated Financial matters are as follows:
Statements’, revenue on the 1. Understand and evaluate effectiveness of design and operation
of the management’s internal control over revenue
consolidated statements for the year
2. Carried out analytical review and evaluate the reasonableness of
ended as of December 31, 2023, is
sales income and gross profit margin by segmenting the business and
4,815.9415 million Yuan. Revenue sales in conjunction with industry development and actual situation
of Bingshan Refrigeration & Heat
39
Company and its subsidiaries of Bingshan Refrigeration & Heat Company.
mainly come from sales of products 3. Sampling test the sales contracts, identify the clause and
and installation project. We consider condition in respect to the contract performance obligation,
consideration and risk and reward transfer of the ownership.
the revenue as the key audit matter,
Evaluate the revenue recognition of Bingshan Refrigeration & Heat
because of the significance of
Company whether it is in line with the accounting standards.
revenue to the overall financial 4. Sampling select product sales revenue record, reconcile to sales
statements, and also the inherent invoice, contracts, dispatch note, acceptance note; Sampling select
risk of revenue manipulation by the installation sales revenue record, reconcile to invoice, installation
management so for the special contracts and completion report and Evaluate the recognition of
purpose. revenue whether is in line with the accounting standards
5. Checking actual installation cost by reviewing the contract
budget, contract, invoice and supportive document with signature for
the equipment received to evaluate the cost whether it really
incurred.
6. Combined with receivable audit, perform confirmation
procedures for key clients
7. Perform cut-off test so to ensure whether the transaction is
recorded into the appropriate accounting period.
4. Other Information
The management of Bingshan Refrigeration & Heat Company (hereinafter referred to as the
“Management”) is responsible for the other information. The other information comprises the
information included in the Bingshan Refrigeration & Heat Company 2023 annual report, but does not
include the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the other
information, we are required to report that fact. We have nothing to report in this regard.
5. Responsibilities of the Management and Those Charged with Governance for the Financial
Statements
The Management is responsible for the preparation of the financial statements in accordance with
Accounting Standards for Business Enterprises to achieve fair presentation; and designing, implementing
and maintaining internal control which is necessary to enable that the financial statements are free from
material misstatement, whether due to fraud or error.
40
In preparing the financial statements, the Management is responsible for assessing Bingshan
Refrigeration & Heat Company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the Management either
intends to liquidate Bingshan Refrigeration & Heat Company or to cease operations, or have no realistic
alternative but to do so.
Those charged with governance are responsible to overseeing Bingshan Refrigeration & Heat Company’s
financial reporting process.
6. Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with auditing standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are generally considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of these financial statements.
During the course of audit in accordance with auditing standards, we exercise professional judgment and
maintain professional skepticism. We also carry out the following works:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our audit. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of its internal control (this sentence would be deleted in circumstance when we are also
responsible to issue an opinion on the effectiveness of internal control in conjunction with the audit of the
financial statements).
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Management.
(4) Conclude on the appropriateness of the Management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on Bingshan Refrigeration & Heat Company’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial statements in accordance with
the auditing standards or, if such disclosures are inadequate, we shall modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
41
future events or conditions may cause Bingshan Refrigeration & Heat Company to cease to continue as a
going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and also
whether the financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
(6) Obtain sufficient and appropriate audit evidence with respect to the financial information of
Bingshan Refrigeration & Heat entities or business activities, and issue an audit opinion. We are
responsible for guiding, supervising and performing group audits and take full responsibility for audit
opinions.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings etc., including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with those
relevant ethical requirements regarding independence, and to communicate with them all relationships
and other matters that may reasonably be thought to bear on our independence and related safeguards,
where applicable.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation
prohibited public disclosure about the matter or when, in rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
ShineWing Certified Public Accountants( LLP) CPA：Sui Guojun (Engagement Partner)
CPA：Zhang Shizhuo
China, Beijing April 24, 2024
42
Consolidated Balance Sheet
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
ITEMS 31 December 2023 01 January 2023
Current Assets:
Monetary funds 951,039,570.11 1,006,165,899.18
Settlement provision
Loans to banks and other financial institutions
Financial asset held for trading
Derivative financial assets
Notes receivable 353,428,922.42 505,945,261.18
Accounts receivable 1,576,433,924.16 1,409,978,442.95
Receivable financing 303,585,218.53 58,792,792.70
Prepayments 153,388,660.48 171,991,468.12
Insurance receivables
Reinsurance Receivable
ProVsion of reinsurance contract reserve receivable
Other receivables 41,396,223.27 51,394,474.24
including: interest receivable
diVdend receivable 14,495.00 14,495.00
Financial assets purchased under agreement to resell
Inventories 1,638,139,479.14 1,395,344,780.24
Contractual asset 237,076,878.71 225,790,875.78
Held for sale assets
Non-current assets due within 1-year 15,715,631.52
Other current assets 26,074,342.33 33,499,577.60
Total Current Assets 5,280,563,219.15 4,874,619,203.51
Non-Current Assets：
Loan and payment on other's behalf disbursed
Debt investment
Other debt investment
Long-term receivables 5,162,458.90
Long-term equity investment 521,274,947.50 562,987,771.94
Other equity instrument investment
Other non-current financial assets 164,024,771.63 149,950,861.31
Investments properties 123,589,681.50 115,332,918.20
43
Fixed assets 1,291,851,402.46 1,229,029,368.93
Construction in process 114,801,351.21 115,577,902.54
Production biological assets
Oil-gas assets
Right-of-use assets 30,548,057.08 30,941,662.26
Intangible assets 210,554,161.22 168,076,720.07
Development cost
Goodwill 286,402,171.93 248,345,508.41
Long-term prepaid expense 5,346,321.60 6,486,566.92
Deferred tax asset 113,648,859.53 95,424,386.61
Other non-current assets 20,243,349.44
Total Non-current Assets 2,882,285,075.10 2,727,316,126.09
Total Assets 8,162,848,294.25 7,601,935,329.60
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
44
Consolidated Balance Sheet (continued)
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
ITEMS 31 December 2023 01 January 2023
Current Liabilities:
Short-term borrowings 262,287,784.38 274,052,990.15
Loans from central bank
Loans from other banks
Financial liability held for trading
Derivative financial liabilities
Notes payable 670,720,999.48 618,944,384.85
Accounts payable 1,655,835,363.01 1,586,098,060.59
Advance received
Contractual liability 787,685,294.53 647,645,820.57
Financial assets sold under agreements to repurchase
Deposits received and hold for others
Entrusted trading of securities
Entrusted underwriting of securities
Employee pay payables 149,497,113.46 118,216,683.23
Taxes and duties payable 22,216,492.26 33,691,523.62
Other payables 278,804,152.17 67,054,250.25
including: interest payable
dividend payable 533,156.00 533,156.00
Fees and commissions payable
Amount due to reinsurance
Held for sale liabilities
Non-current liabilities due within 1-year 150,645,347.64 63,105,954.56
Other current liabilities 203,315,864.43 204,650,003.24
Total Current Liabilities 4,181,008,411.36 3,613,459,671.06
Non-current Liabilities:
Insurance contract provision
Long-term borrowings 679,700,000.00 715,100,000.00
Bonds Payable
including: preference share
perpetual debt
Lease liability 24,134,986.97 11,230,532.05
Long-term payables 10,331,937.30 31,009,644.16
Long-term employee payables
Provision 4,544,802.88 18,805,967.43
Deferred income 98,274,267.80 99,754,346.39
Deferred Tax liabilities 60,811,462.07 52,384,532.28
Other non-current liabilities
Total Non-current Liabilities 877,797,457.02 928,285,022.31
Total Liabilities 5,058,805,868.38 4,541,744,693.37
Owners Equity(or Shareholders Equity):
45
Paid-in capital（Share capital) 843,212,507.00 843,212,507.00
Other equity instrument
Including:preference share
perpetual capital securities
Capital reserve 717,097,098.38 717,097,098.38
Less: Treasury stock
Other comprehensive income 2,208,669.73 2,208,669.73
Chartered reserve 449,374.96
Surplus reserves 867,159,439.34 825,222,039.39
△Provision for general risk
Undistributed profit 617,386,488.34 618,380,112.53
Equity attributable to equity holders of the Company 3,047,513,577.75 3,006,120,427.03
*Minority interest 56,528,848.12 54,070,209.20
Total Equity 3,104,042,425.87 3,060,190,636.23
Total Liabilities and Equity 8,162,848,294.25 7,601,935,329.60
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
46
Balance Sheet of Parent Company
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
ITEMS 31 December 2023 01 January 2023
Current Assets:
Monetary funds 177,430,880.63 361,446,559.26
Tradable financial asset
Derivative financial assets
Notes receivable 64,984,113.98 100,218,283.64
Accounts receivable 612,933,182.91 629,954,649.50
Receivable financing 13,562,917.97 12,451,483.74
Prepayments 62,988,427.81 61,446,678.23
Other receivables 138,883,665.74 36,021,805.53
including: interest receivable
dividend receivable 110,000,000.00
Inventories 394,763,078.40 342,276,945.65
Contractual assets 106,401,142.42 83,739,043.68
Held for sale assets
Non-current assets due within 1-year 15,715,631.52
Other current assets 3,046,484.01 565,836.48
Total Current Assets 1,574,993,893.87 1,643,836,917.23
Non-Current Assets：
Debt investment
Other debt investment
Long-term receivables 5,162,458.90
Long-term equity investment 2,930,381,144.87 2,720,998,153.80
Other equity instrument investment
Other non-current financial assets 162,709,629.13 148,635,718.81
Investments properties 86,587,170.43 90,986,890.03
Fixed assets 632,491,373.17 646,432,825.98
Construction in process 42,867,809.00 48,905,875.93
Production biological assets
Oil-gas assets
Right-of-use assets 13,360,039.29 14,975,625.90
47
Intangible assets 68,437,853.58 72,158,994.17
Development cost
Goodwill
Long-term unamortized expense 4,434,379.95 5,553,733.11
Deferred tax asset 27,809,290.39 21,597,992.46
Other non-current assets
Total Non-current Assets 3,969,078,689.81 3,775,408,269.09
Total Assets 5,544,072,583.68 5,419,245,186.32
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiu the person in charge of the accounting office:Li Sheng
Balance Sheet of Parent Company (continued)
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
ITEMS 31 December 2023 01 January 2023
Current Liabilities:
Short-term borrowings 219,000,000.00 234,980,000.00
Financial liability held for trading
Derivative financial liabilities
Notes payable 172,920,936.32 259,002,815.07
Accounts payable 418,383,161.14 406,794,291.57
Advance received
Contractual liability 108,021,877.17 139,622,706.08
Employee pay payables 12,109,637.82 14,557,783.63
Taxes and duties payable 3,523,630.66 9,430,543.11
Other payables 174,010,076.60 21,061,597.80
including: interest payable
dividend payable 533,156.00 533,156.00
Held for sale liabilities
Non-current liabilities due within 1-year 134,539,973.21 42,972,752.44
Other current liabilities 69,349,185.65 106,146,986.20
Total Current Liabilities 1,311,858,478.57 1,234,569,475.90
Non-current Liabilities:
Long-term borrowings 679,700,000.00 715,100,000.00
Bonds Payable
including: preference share
perpetual debt
Lease liability 10,878,947.77 12,613,986.87
Long-term payables 12,908,810.87
48
Long-term employee payables
Provision for liabilities
Deferred income 61,369,767.80 61,685,846.39
Deferred Tax liabilities 22,714,636.67 20,649,497.74
Other non-current liabilities
Total Non-current Liabilities 774,663,352.24 822,958,141.87
Total Liabilities 2,086,521,830.81 2,057,527,617.77
Owners Equity(or Shareholders Equity):
Paid-in capital（Share capital) 843,212,507.00 843,212,507.00
Other equity instrument
Including:preference share
perpetual capital securities
Capital reserve 755,146,592.54 755,146,592.54
Less: Treasury stock
Other comprehensive income 1,246,569.06 1,246,569.06
Chartered reserve
Surplus reserves 867,159,439.34 825,222,039.39
Undistributed profit 990,785,644.93 936,889,860.56
Total Equity 3,457,550,752.87 3,361,717,568.55
Total Liabilities and Equity 5,544,072,583.68 5,419,245,186.32
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
49
Consolidated Income Statement
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
Item Current year Last year
Ⅰ、Total operating revenue 4,815,941,467.70 2,893,085,310.29
Including: Operating revenue 4,815,941,467.70 2,893,085,310.29
Interest income
Earned premiums
Fees and commission income
Ⅱ、Total cost of operation 4,718,340,202.43 2,988,322,715.94
Including: Cost of operation 4,005,597,458.19 2,537,528,841.40
Interest expenses
Fees and commission expenses
Payments to surrenders of insurance contracts
Net amount of insurance claims expenses
Net charges of provision for insurance contracts
Dividends policy expenses
Reinsurance expenses
Taxes and surcharges 33,968,677.08 22,061,626.36
Selling and distribution expenses 233,862,026.48 153,735,714.96
Administrative expenses 250,568,245.50 186,378,204.50
R&D 164,185,717.71 76,792,805.69
Financial expenses 30,158,077.47 11,825,523.03
Including: Interest expenses 37,918,133.57 18,581,726.78
Interest income 10,558,433.14 5,850,062.80
add: other income 30,179,668.51 7,173,155.47
investment income (Loss listed with "-") 1,106,628.72 306,688,497.94
Including: income from investments in associates and joint ventures -4,884,731.99 -37,218,861.27
Gain arising from derecognition of financial asset measuredat amortized
cost
Exchange gain (Loss listed with "-")
Gain on hedging of net exposure (Loss listed with "-")
Gain on FV change (Loss listed with "-") 14,073,910.32 -46,991,034.40
Loss on impairment of credit(Loss listed with "-") -69,732,055.75 -82,695,388.75
Loss on impairment of assets(Loss listed with "-") -14,405,692.66 -74,825,795.00
Gain on asset disposal(Loss listed with "-") -1,184,930.14 194,556.13
Ⅲ、Operating profit (Loss listed with "-") 57,638,794.27 14,306,585.74
Add: Non-operating income 14,533,922.09 11,841,528.55
Less: Non-operating expenses 6,966,477.53 5,204,540.35
Ⅳ、 Total profit (Loss listed with "-") 65,206,238.83 20,943,573.94
Less: Income tax expenses 11,031,699.08 576,816.28
Ⅴ、Net profit (Net loss listed with "-") 54,174,539.75 20,366,757.66
(I) Classification by continuity 54,174,539.75 20,366,757.66
1、Net profit from continuing operation 54,174,539.75 20,366,757.66
2、Net profit from discontinuing operation
(II) Classification by ownership 54,174,539.75 20,366,757.66
1、Net profit attributable to equity holders(shareholders) of the Company 49,375,900.83 18,731,969.48
2、Minority interest 4,798,638.92 1,634,788.18
50
Ⅵ、 Other comprehensive income net off tax 29,988.00
Net other comprehensive income net off tax attributable to equity
29,988.00
holders(shareholders) of the parent company
(Ⅰ)Items that may not be reclassified subsequently to the income statement
1.Change in net asset/liability from remeasurment on defined benefit plan
2.Under equity method, proportionate share of other comprehensive
income in invested company that may not be reclassified subsequently to
3.FV change of other equity instrument investment
4.FV change of own credit risk
5.Others
(Ⅱ)Items that may be reclassified subsequently to the income statement 29,988.00
1.Under equity method, proportionate share of other comprehensive income
invested company that may be reclassified subsequently to the income statement 29,988.00
2.FV change of other debt instrument investment
3.Financial assets reclassfied into other comprehensive income
4.Credit impairment provision of other debt investment
5.Cash flow hedges effective portion
6.Foreign currency translation difference
7.Others
Net other comprehensive income net off tax attributable to Minority interest
Ⅶ、Total comprehensive income 54,174,539.75 20,396,745.66
Total comprehensive income attributable to parent Company 49,375,900.83 18,761,957.48
Total comprehensive income attributable to minority interest 4,798,638.92 1,634,788.18
Ⅷ、 Earnings per share
(Ⅰ)Basic earnings per share 0.06 0.02
(Ⅱ)Diluted earnings per share 0.06 0.02
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
51
Income Statement of Parent Company
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., LtAmount Unit:RMB
Item Current year Last year
Ⅰ、Operating revenue 1,147,567,097.70 1,048,142,993.33
Less: Cost of operation 949,400,269.07 909,850,529.59
Taxes and surcharges 12,915,605.84 12,305,882.57
Selling and distribution expenses 58,418,856.46 54,927,585.49
Administrative expenses 83,623,829.67 92,850,447.59
R&D 34,643,670.44 28,982,093.78
Financial expenses 30,961,451.10 12,093,600.10
Including: Interest expenses 30,060,509.49 12,261,980.25
Interest income 928,862.25 2,557,312.33
Add: Other income 13,476,491.91 1,983,356.24
Investment income (Loss listed with "-") 137,165,248.86 289,868,640.72
Including: income from investments in associates and joint ventures -5,506,787.08 -37,651,689.22
Gain arising from derecognition of financial asset
measured at amortized
cost
Gain on hedging of net exposure (Loss listed with "-")
Gain on FV change (Loss listed with "-") 14,073,910.32 -46,991,034.40
Loss on impairment of credit(Loss listed with "-") -26,975,462.06 -27,779,271.62
Loss on impairment of assets(Loss listed with "-") -15,398,757.36 -13,966,272.08
Gain on asset disposal(Loss listed with "-") 25,669.74 84,294.67
Ⅱ、Operating profit (Loss listed with "-") 99,970,516.53 140,332,567.74
Add: Non-operating income - 49,394.31
Less: Non-operating expenses 451,394.65 61,252.08
Ⅲ、 Total profit (Loss listed with "-") 99,519,121.88 140,320,709.97
Less: Income tax expenses -4,746,187.51 -17,258,852.19
Ⅳ、Net profit (Net loss listed with "-") 104,265,309.39 157,579,562.16
1、Net profit from continuing operation 104,265,309.39 157,579,562.16
2、Net profit from discontinuing operation
Ⅴ、 Other comprehensive income net off tax 29,988.00
(Ⅰ)Items that may not be reclassified subsequently to the income statement
1.Change in net asset/liability from remeasurment on defined benefit plan
2.Under equity method, proportionate share of other comprehensive
income in invested company that may not be reclassified subsequently to the
income statement
3.FV change of other equity instrument investment
52
4.FV change of own credit risk
5.Others
(Ⅱ)Items that may be reclassified subsequently to the income statement 29,988.00
1.Under equity method, proportionate share of other comprehensive income
29,988.00
invested company that may be reclassified subsequently to the income statement
2.FV change of other debt instrument investment
3.Financial assets reclassfied into other comprehensive income
4.Credit impairment provision of other debt investment
5.Cash flow hedges effective portion
6.Foreign currency translation difference
7.Others
Ⅵ、Total comprehensive income 104,265,309.39 157,609,550.16
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
53
Consolidated Cash Flow Statement
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., LtAmount Unit:RMB
Item Current year Last year
1. Cash flows from operating activities:
Cash received from sales of goods and rendering of services 4,113,893,219.72 2,299,565,737.92
Net increase in deposits from customers and inter-banks deposits
Net increase in loans from central bank
Net increase in loans from other financial institutions
Cash receipts of premium of direct insurance contracts
Net cash received from reinsurance contracts
Net increase in deposits from insurance policy holders and investment
Cash receipts of interest, fees and commission
Net increase in placement from banks and other financial institution
Net increase in sales and repurchase operations
Entrusted trading of securities
Cash received from taxes refund 28,408,313.78 27,845,766.93
Cash received relating to other operating activities 126,828,658.19 92,440,515.31
Sub-total of cash inflows from operating activities 4,269,130,191.69 2,419,852,020.16
Cash paid for goods and services 3,076,384,953.42 1,765,774,138.68
Net increase in loans and disbursement to customers
Net increase in deposit with central bank and inter-banks
Cash paid for claims of direct insurance contracts
Net increase of loans to other banks
Cash paid for interest, fee and commission
Cash paid for dividends of insurance policies
Cash paid to and on behalf of employees 735,972,826.45 392,733,128.51
Payments of taxes and surcharges 190,790,155.61 85,488,578.90
Cash paid relating to other operating activities 290,422,923.95 232,103,473.43
Sub-total of cash outflows from operating activities 4,293,570,859.43 2,476,099,319.52
Net cash flows from operating activities -24,440,667.74 -56,247,299.36
2. Cash flows from investment activities:
Cash received from return of investments 304,791,101.68
Cash received from investments income 44,342,521.09 109,215,313.16
Net cash received from disposal of fixed assets, intangible assets and other 1,668,006.05 668,334.46
long-term assets
Net cash received from disposal of subsidiaries and other business units 5,264,093.90
Cash received relating to other investing activities
Sub-total of cash inflows from investing activities 46,010,527.14 419,938,843.20
Cash paid to acquire fixed assets, intangible assets and other long-term assets 89,321,945.50 50,713,747.56
Cash paid for investments
Net increase in pledged deposits
Net cash paid to acquire subsidiaries and other business units 12,056,951.02 401,824,582.67
Cash paid relating to other investing activities 168,000,000.00
Sub-total of cash outflow from investing activities 269,378,896.52 452,538,330.23
Net cash flows from investing activities -223,368,369.38 -32,599,487.03
3. Cash flows from financing activities
Cash received from investment absorption
54
Including: Cash received by subsidiaries from investment absorpotion of
non-controlling interest
Cash received from loans granted 385,643,636.90 847,850,000.00
Cash received relating to other financing activities 65,675,932.80 23,991,047.27
Sub-total of cash inflows from financing activities 451,319,569.70 871,841,047.27
Cash paid for settlement of borrowings 341,900,000.00 242,005,111.11
Cash paid for dividends, profits appropriation or payments of interest 41,772,038.58 30,640,401.33
Including: Dividens and profits paid to non-controlling interest
Cash paid relating to other financing activities 70,690,408.48 29,129,116.86
Sub-total of cash outflows from financing activities 454,362,447.06 301,774,629.30
Net cash flows from financing activities -3,042,877.36 570,066,417.97
4. Effect of changes in foreign exchange rate on cash and cash equivalents -369,552.71 1,472,833.72
5. Net increase in cash and cash equivalents -251,221,467.19 482,692,465.30
Add: Cash and cash equivalents at beginning of year 921,661,803.17 438,969,337.87
6. Cash and cash equivalents at end of year 670,440,335.98 921,661,803.17
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
55
Cash Flow Statement of Parent Company
Name of Enterprise： Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit :RMB
Item Current year Last year
1.Cash flow from operating activities
Cash receipts from sale of goods or rendering of services 1,051,980,732.24 769,156,429.00
Refunds of taxes 7,968,777.52
Other cash receipts in operating activities 41,293,162.40 16,186,561.44
Sub-total of cash inflows from operating activities 1,093,273,894.64 793,311,767.96
Cash payments for goods and services acquired 838,210,003.11 721,626,515.16
Cash payments to and on behalf of employees 117,935,562.40 116,047,528.96
Tax and duties payments 47,714,652.88 30,826,994.20
Other cash payments for operating activities 61,625,120.00 73,762,376.92
Sub-total of cash outflows from operating activities 1,065,485,338.39 942,263,415.24
Net cash flows from operating activities 27,788,556.25 -148,951,647.28
2.Cash flows from investing activities
Cash receipts from return of investments 330,679,301.68
Cash receipts from investments income 71,227,317.94 262,646,360.17
Net cash receipts from disposal of fixed assets, intangible assets and other long-term assets 33,000.00 5,000.00
Net cash receipts from disposal of subsidiaries and other businesses
Other cash receipts in investing activities
Sub-total of cash inflows from investing activities 71,260,317.94 593,330,661.85
Cash payments for acquired fixed assets, intangible assets and other long-term assets 15,937,868.92 14,815,415.96
Cash payments for investment 253,285,500.00 1,010,883,060.00
Net cash payments for acquisition of subsidiaries and other businesses
Other cash payments in investing activities
Sub-total of cash outflows from investing activities 269,223,368.92 1,025,698,475.96
Net cash flows from investment activities -197,963,050.98 -432,367,814.11
3.Cash flows from financing activities
Cash received from capital injection
Cash receipts from borrowings 336,000,000.00 829,000,000.00
Other cash receipts in financing activities 5,971,249.02
Sub-total of cash inflows from financing activities 336,000,000.00 834,971,249.02
Cash paid for settlement of borrowings 296,900,000.00 237,000,000.00
Cash paid for dividends, profits appropriation or payments of interest 35,400,176.36 23,036,986.09
56
Other cash payments in financing activities 21,382,927.78 2,535,000.00
Sub-total of cash outflows from financing activities 353,683,104.14 262,571,986.09
Net cash flows from financing activities -17,683,104.14 572,399,262.93
4.Effect of changes in foreign exchange rate on cash and cash equivalents -61,918.58 19,977.77
5.Net increases in cash and cash equivalents -187,919,517.45 -8,900,220.69
Add: the beginning balance of cash and cash equivalent 361,032,768.50 369,932,989.19
6.The ending balance of cash and cash equivalent 173,113,251.05 361,032,768.50
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
57
Consolidated Statement of Changes in Shareholer's Equity
Current year
Equity attributable to the equity holders of the Company
Item Paid-up capital Other equity instrument Other △General
Less: Treasury Special Undistributed Minority interests Total equity
(share capital) Capital reserves comprehensive Surplus reserves risk Others Sub-total
shares reserves profits
preference perpetual income provision
others
share bond
1. Balance at end of last year 843,212,507.00 717,097,098.38 2,208,669.73 825,226,634.15 618,445,922.58 3,006,190,831.84 54,077,970.99 3,060,268,802.83
Add: Changes in accounting policies -4,594.76 -65,810.05 -70,404.81 -7,761.79 -78,166.60
Correction of prior periods errors
Business combination within the same control
Others
2. Balance at beginning of current year 843,212,507.00 717,097,098.38 2,208,669.73 825,222,039.39 618,380,112.53 3,006,120,427.03 54,070,209.20 3,060,190,636.23
3. Increase/ Decrease for current year (Decrease listed
449,374.96 41,937,399.95 -993,624.19 41,393,150.72 2,458,638.92 43,851,789.64
with "-")
（Ⅰ）Total of comprehensive income 49,375,900.83 49,375,900.83 4,798,638.92 54,174,539.75
（Ⅱ）Capital contribution and reduction
1.Ordinary share
2.Capital contributed by other equity instrument holders
3.Share-based payments charged to equity
4.Others
（III）Profit appropriations 41,937,399.95 -50,369,525.02 -8,432,125.07 -2,340,000.00 -10,772,125.07
1.Appropriation to surplus reserves 41,937,399.95 -41,937,399.95
2.Appropriation to general risks provision
3.Appropriation to equity holders (or shareholders) -8,432,125.07 -8,432,125.07 -2,340,000.00 -10,772,125.07
4.Others
（IV）Transfer within equity
1.Transfer of capital reserve to capital (share capital)
2.Transfer of surplus reserves to capital (share capital)
3.Surplus reserves making up of losses
4.Carried over the change in net asset/liability from
remeasurment on defined benefit plan
5.Transfer of other comprehensive to retained earnings
6.Others
（V）Special reserves 449,374.96 449,374.96 449,374.96
1.Provision for special reserve 13,214,150.71 13,214,150.71 13,214,150.71
2.Utilisation of special reserve 12,764,775.75 12,764,775.75 12,764,775.75
（VI）Others
4、Balance at end of current year 843,212,507.00 717,097,098.38 2,208,669.73 449,374.96 867,159,439.34 617,386,488.34 3,047,513,577.75 56,528,848.12 3,104,042,425.87
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiu the person in charge of the accounting office:Li Sheng
58
Consolidated Statement of Changes in Shareholer's Equity(continued)
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
Last year
Equity attributable to the equity holders of the Company
Item Other equity instrument
Paid-up capital Other △General Minority interests Total equity
Less: Treasury Special Undistributed
(share capital) Capital reserves comprehensive Surplus reserves risk Others Sub-total
shares reserves profits
preference perpetual income provision
others
share bond
1. Balance at end of last year 843,212,507.00 720,215,866.78 2,178,681.73 809,471,199.64 627,764,582.32 3,002,842,837.47 46,654,771.50 3,049,497,608.97
Add: Changes in accounting policies -7,116.47 -539,927.37 -547,043.84 -8,916.10 -555,959.94
Correction of prior periods errors
Business combination within the same control
Others
2. Balance at beginning of current year 843,212,507.00 720,215,866.78 2,178,681.73 809,464,083.17 627,224,654.95 3,002,295,793.63 46,645,855.40 3,048,941,649.03
3. Increase/ Decrease for current year (Decrease listed
-3,118,768.40 29,988.00 15,757,956.22 -8,844,542.42 3,824,633.40 7,424,353.80 11,248,987.20
with "-")
（Ⅰ）Total of comprehensive income 29,988.00 18,731,969.48 18,761,957.48 1,634,788.18 20,396,745.66
（Ⅱ）Capital contribution and reduction -3,118,768.40 -3,386,430.61 -6,505,199.01 7,589,565.62 1,084,366.61
1.Ordinary share
2.Capital contributed by other equity instrument holders
3.Share-based payments charged to equity
4.Others -3,118,768.40 -3,386,430.61 -6,505,199.01 7,589,565.62 1,084,366.61
（III）Profit appropriations 15,757,956.22 -24,190,081.29 -8,432,125.07 -1,800,000.00 -10,232,125.07
1.Appropriation to surplus reserves 15,757,956.22 -15,757,956.22
2.Appropriation to general risks provision
3.Appropriation to equity holders (or shareholders) -8,432,125.07 -8,432,125.07 -1,800,000.00 -10,232,125.07
4.Others
（IV）Transfer within equity
1.Transfer of capital reserve to capital (share capital)
2.Transfer of surplus reserves to capital (share capital)
3.Surplus reserves making up of losses
4.Carried over the change in net asset/liability from
remeasurment on defined benefit plan
5.Transfer of other comprehensive to retained earnings
6.Others
（V）Special reserves
1.Provision for special reserve 4,613,180.31 4,613,180.31 4,613,180.31
2.Utilisation of special reserve 4,613,180.31 4,613,180.31 4,613,180.31
（VI）Others
4、Balance at end of current year 843,212,507.00 717,097,098.38 2,208,669.73 825,222,039.39 618,380,112.53 3,006,120,427.03 54,070,209.20 3,060,190,636.23
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
59
Statement of Changes in Shareholer's Equity of Parent Company
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd For the Year of 2023 Amount Unit:RMB
Current year
Item Paid-up capital Other equity instrument Other
Less: Treasury Special
(share capital) Capital reserves comprehensive Surplus reserves Undistributed profits Others Total equity
shares reserves
preference perpetual income
others
share bond
1. Balance at end of last year 843,212,507.00 755,146,592.54 1,246,569.06 825,226,634.15 936,931,213.43 3,361,763,516.18
Add: Changes in accounting policies -4,594.76 -41,352.87 -45,947.63
Correction of prior periods errors
Others
2. Balance at beginning of current year 843,212,507.00 755,146,592.54 1,246,569.06 825,222,039.39 936,889,860.56 3,361,717,568.55
3. Increase/ Decrease for current year (Decrease listed
41,937,399.95 53,895,784.37 95,833,184.32
with "-")
（Ⅰ）Total of comprehensive income 104,265,309.39 104,265,309.39
（Ⅱ）Capital contribution and reduction
1.Ordinary share
2.Capital contributed by other equity instrument holders
3.Share-based payments charged to equity
4.Others
（III）Profit appropriations 41,937,399.95 -50,369,525.02 -8,432,125.07
1.Appropriation to surplus reserves 41,937,399.95 -41,937,399.95 -
2.Appropriation to equity holders (or shareholders) -8,432,125.07 -8,432,125.07
3.Others
（IV）Transfer within equity
1.Transfer of capital reserve to capital (share capital)
2.Transfer of surplus reserves to capital (share capital)
3.Surplus reserves making up of losses
4.Carried over the change in net asset/liability from
remeasurment on defined benefit plan
5.Transfer of other comprehensive to retained earnings
6.Others
（V）Special reserves
1.Provision for special reserve
2.Utilisation of special reserve
（VI）Others
4、Balance at end of current year 843,212,507.00 755,146,592.54 1,246,569.06 867,159,439.34 990,785,644.93 3,457,550,752.87
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiu the person in charge of the accounting office:Li Shen
60
Statement of Changes in Shareholer's Equity of Parent Company(continued)
For the Year of 2023
Last year
Item Paid-up capital Other equity instrument Other
Less: Treasury Special
(share capital) Capital reserves comprehensive Surplus reserves Undistributed profits Others Total equity
shares reserves
preference perpetual income
others
share bond
1. Balance at end of last year 843,212,507.00 755,146,592.54 1,216,581.06 809,471,199.64 803,564,427.95 3,212,611,308.19
Add: Changes in accounting policies -7,116.47 -64,048.26 -71,164.73
Correction of prior periods errors
Others
2. Balance at beginning of current year 843,212,507.00 755,146,592.54 1,216,581.06 809,464,083.17 803,500,379.69 3,212,540,143.46
3. Increase/ Decrease for current year (Decrease listed
29,988.00 15,757,956.22 133,389,480.87 149,177,425.09
with "-")
（Ⅰ）Total of comprehensive income 29,988.00 157,579,562.16 157,609,550.16
（Ⅱ）Capital contribution and reduction
1.Ordinary share
2.Capital contributed by other equity instrument holders
3.Share-based payments charged to equity
4.Others
（III）Profit appropriations 15,757,956.22 -24,190,081.29 -8,432,125.07
1.Appropriation to surplus reserves 15,757,956.22 -15,757,956.22
2.Appropriation to equity holders (or shareholders) -8,432,125.07 -8,432,125.07
3.Others
（IV）Transfer within equity
1.Transfer of capital reserve to capital (share capital)
2.Transfer of surplus reserves to capital (share capital)
3.Surplus reserves making up of losses
4.Carried over the change in net asset/liability from
remeasurment on defined benefit plan
5.Transfer of other comprehensive to retained earnings
6.Others
（V）Special reserves
1.Provision for special reserve 2,791,153.21 2,791,153.21
2.Utilisation of special reserve 2,791,153.21 2,791,153.21
（VI）Others
4、Balance at end of current year 843,212,507.00 755,146,592.54 1,246,569.06 825,222,039.39 936,889,860.56 3,361,717,568.55
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiu the person in charge of the accounting office:Li Sheng
61
I. General Information
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd (the “Company”) previously
named as Dalian Refrigeration Company Limited, was reorganized and reformed from main
part of former Dalian Refrigeration Factory. On December 8, 1993, the Company went to the
public as a listed company at Shenzhen Stock Exchange Market. On March 20, 1998, the
Company successfully went to the public at B share market and listed at Shenzhen Stock
Exchange Market with total share capital of RMB350,014,975.00Yuan. The registered
address is No. 106 East Liaohe Road, Dalian Economic and Technological Development
Zone, Liaoning Province, as same as the headquarters’ address. The unified social credit code
is 912102002423613009 on the business license.
According to the 13th meeting of the 6th generation of board, extraordinary general meeting
for 2015 fiscal year and ' Restricted share incentive plan (draft)', the Company planned to
introduce an ordinary share to incentive objectives, which was 10,150,000 number of shares
would be granted to 41 share incentive objectives at granted price of RMB5.56Yuan per share.
Up to March 12, 2015, the Company received new added share capital of
RMB10,150,000.00Yuan.
The general meeting for 2015 fiscal year held on April 21, 2016 approved the profit
distribution policy for the year of 2015, which agrees the profit distribution based on the total
360,164,975 number of shares as share capital, paid share dividend of 5 common shares for
every 10 shares through capital reserve. The policy stated above was fully implemented on
May 5, 2016, and the registered capital was altered to 540,247,462.00Yuan.
The 17thmeeting of the 6th generation of board was held on June 4, 2015 and the 2nd interim
shareholders’ meeting was held on June 24, 2015, meeting deliberated and passed the
proposal of non-public offering of ‘A shares’. China’s Securities Regulatory Commission
issued SFC license [2015]3137 on December 30, 2015, approving that new non-public
offering cannot exceeded 38,821,954 numbers of shares. The company implemented the post
meeting procedures for China’s Securities Regulatory Commission, which is regarding
adjustment of bottom price and the number of the shares issued after the implementation of
profit distribution policy of 2015 in May, 2016, and accordingly revised the upper limit of
non-public offering of share to58,645,096 number of new ‘A shares’. The company issued the
non-public offering of 58,645,096 number of ‘A shares’ to 7 investors, and as a result, the
total number of shares of the Company is changed to 598,892,558 shares, and the par value is
1yuan per share and the total share capital is 598,892,558.00Yuan.
According to the ‘Restricted Share Incentive Plan(draft) of Dalian Refrigeration Company
Limited for the year of 2016’ and the ‘Proposal regarding the shareholders’ meeting
authorized the board of directors to implement the Restricted Share Incentive Plan’ approved
62
on the 3rd provisional general meeting held on September 13, 2016, the 9th meeting of the 7th
generation of board deliberated and passed the ‘Proposal about granting the restricted shares
to incentive targets’ on September 20, 2016 and set September 20 , 2016 as share granted date,
and granted 12,884,000 number of restricted shares to 118 incentive targets at granted price
of 5.62Yuan per share. By November 22, 2016, The Company has actually received the
newly subscribed registered share capital of 12,884,000.00Yuan subscribed by incentive
targets.
On May 19, 2017, the general meeting for 2016 fiscal year was held and profit appropriation
scheme for 2016 FY was approved, which was every 10 shares will be increased by 4 shares
through capital reserve based on the total 611,776,558 number of shares. After the profit
appropriation scheme, the registered capital was changed to RMB856,487,181.00Yuan.
On December 28, 2017, The Company held the 3rd extraordinary shareholders meeting in
2017, and reviewed and approved the “Proposal on Repurchasing and Retiring Partially
Restricted Stocks of the 2016 Restricted Stock Incentive Plan”. On March 8, 2018, after The
Company's repurchase and cancellation, The Company implemented the corresponding
capital reduction procedures according to law. The registered capital of The Company was
changed from 856,487,181.00Yuan to 855,908,981.00 Yuan.
On May 4, 2018, The Company held the 21st meeting of the 7th Board of Directors, and
reviewed and approved the “Proposal on Repurchasing and Retiring Partially Restricted
Stocks of the 2015 Restricted Stock Incentive Plan". On June 29, 2018, after The Company's
repurchase and cancellation, The Company implemented the corresponding capital reduction
procedures according to law. The registered capital of The Company was changed from
855,908,981.00 Yuan to 855,434,087 .00Yuan.
On January 17th, 2019, the 1st interim shareholders’ meeting was held and approved for
“Proposal on Termination of the 2016 Restricted Stock Incentive Plan and Repurchasing and
Retiring Restricted Stocks Plan”. Up to February 25th, 2019, The Company has completed the
repurchasing and retiring stocks plan, respectively The Company shall perform the
corresponding capital reduction procedures in accordance with the law and the registered
capital decreased from 855,434,087.00Yuan to 843,212,507.00Yuan.
On December 20th, 2019, The Company held the 7th meeting of the 8th Board of Directors and
approved to change The Company’s name from Dalian Refrigeration Company Limited to
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
The company is in general equipment manufacturing industry. The main business activities
are the research and development, production and sales of various industrial refrigeration
components, as well as the design, production and installation of complete engineering
projects. The main products include: scroll type, piston type, screw type compressor units,
cold water machine and other refrigeration equipment and all kinds of complete sets of
63
refrigeration projects.
This financial report is approved by the board of directors on April 24,2024. The financial
statements will be reviewed at general meeting.
II. Financial Statements Preparation Basis
（1） Preparing basis
The group’s financial statements are prepared according to the actual occurred transactions
and events, and in accordance with ‘Accounting Standards for Business Enterprises’, its
application guidelines, interpretations and other relevant provisions promulgated by the
Ministry of Finance (collectively referred to as "Accounting Standards for Business
Enterprises") and " No. 15 of Information Disclosure and Reporting Rules for Publicly Listed
Companies - General Provisions for Financial Reports" (revised in 2023) promulgated by the
China Securities Regulatory Commission (hereinafter referred to as the "CSRC").
（2） Going concern
The group has assessed the capacity to continually operate within 12 months since December
31, 2023, and hasn’t found the major issues impacting on the sustainable operation ability.
The Company’s financial statements are prepared on the basis of going concern assumption.
III. Significant Accounting Policies and Accounting Estimates
1. Declaration for compliance with accounting standards for business enterprises
The financial statements are prepared in line with the requirements of Accounting Standard
for Business Enterprise, and reflect the relative information of the financial position for the
year ended as of December 31, 2023, operating performance, cash flow of the Company and
the group for the year then ended truly and fully.
2. Accounting period
The group adopts the Gregorian calendar year as accounting period from Jan 1 to Dec 31.
3. Operating cycle
The group sets twelve months for one operating cycle.
4. Functional currency
The group adopts RMB as functional currency.
5. Materiality criteria set up method and basis
The financial statements preparation and disclosure are in line with materiality. For those
matters to be disclosed and need judgement for materiality, materiality criteria set up method
and basis are as follows:
64
In the notes to
Disclosures involved by the financial Materiality criteria set up method and
materiality judgement statements basis
Significant receivables with Single provision is over 10 million Yuan and
individual provision for bad Note VI.3 represents more than 10% of the total
debts provision
Single provision is over 10 million Yuan and
Collection or reverse of
Note VI.3 represents more than 10% of the total
significant receivables
provision
Single provision is over 10 million Yuan and
Significant receivables written
Note VI.3 represents more than 10% of the total
off
provision
Significant construction in
Note XVI.16 Single project budget over 30 million Yuan
progress
The book value of long-term equity
investment in a single investee accounts for
more than 10% of the group's net assets and
the amount is greater than 100 million Yuan,
Significant JV or associates Note VIII.3
or the gain or loss on investment under the
long-term equity investment equity method
accounts for more than 10% of the group's
consolidated net profit
Subsidiary’s net assets are more than10% of
Significant subsidiary the group asses and its net profit is more than
10% of consolidated profit
6. Accounting for business combination under same control and not under same control
（1） Business combination under the same control
Business combination under the same control is the situation where entities participating the
merger are controlled by the same party or controlled by parties under same ultimate control
before and after merger and the control is not temporary.
The group, as an acquirer, the assets and liabilities that the group obtained in a business
combination under the same control should be measured on the basis of their carrying amount
of the acqiree in the ultimate control party’s consolidated financial statements on the
combining date. As for the balance between the carrying amount of the net assets obtained by
the combining party and the carrying amount of the consideration paid by it, the capital
65
surplus shall be adjusted. If the capital surplus is not sufficient to be offset, the retained
earnings shall be adjusted.
（2） Business combination not under same control
Business combination not under the same control is the situation where entities participating
the merger are not controlled by the same party or not controlled by parties under same
ultimate control before and after merger.
When the group is an acquirer, for a business combination not under same control, the asset,
liability and contingent liability obtained, shall be measured at the fair value on the
acquisition date. The difference, when combination cost exceeds proportionate share of the
fair value of identifiable net assets of acquire should be recognized as goodwill. If the
combination cost is less than proportionate share of the fair value of identifiable net assets of
acquiree, firstly, fair value of identifiable asset, liability or contingent liability shall be
reviewed, and so the fair value of non-monetary assets or equity instruments issued in the
combination consideration , after review, still the combination cost is less than proportionate
share of the fair value of identifiable net assets of acquire, the difference should be recognized
as non-operating income.
If a business consolidation not under common control is finally achieved in stages, when
preparing the consolidated financial statements, the acquirer shall remeasure its previously
held equity interest in the acquiree at its fair value on acquisition date and recognize the gain
or loss as investment income for the current period. Other comprehensive income, under
equity method accounting rising from the interest held in acquiree in relation to the period
before the acquisition, and changes in the value of its other equity other than net profit or loss,
other comprehensive income and profit appropriation shall be transferred to investment gain
or loss for the period in which the acquisition incurs, excluding the other comprehensive
income from the movement on the remeasurement of ne asset or liability of defined benefit
plan.
7. Criteria of control judgment and method of preparation of consolidated financial
statements
Consolidation scope is determined on the control basis including the Company and all
subsidiaries controlled by the Company. Control criteria is that the group has the power over
the investees, enjoy the variable return by involving the relative activities of the investees and
also has the impact on the return amount through the power over the investees.
If subsidiaries adopt different accounting policy or have different accounting period from the
parent company, appropriated adjustments shall be made in accordance with the Company
policy in preparation of the consolidated financial statements.
All significant intergroup transactions, outstanding balances and unrealized profit shall be
66
eliminated in full when preparing the consolidated financial statements. Portion of the
subsidiary’s equity not belonging to the parent, profit, loss for the current period, portion of
other comprehensive income and total comprehensive belonging to minority interest, shall be
presented separately in the consolidated financial statements under “minority interest of
equity”, minority interest of profit and loss”, “other comprehensive income attributed to
minority interest” and “total comprehensive income attributed to minority interest” title.
If a subsidiary is acquired under common control, its operation results and cash flow shall be
consolidated since the beginning of the consolidation period. When preparing the comparative
consolidated financial statements, adjustments shall be made to relevant items of comparative
figures as regarded that reporting entity established through consolidation has been always
existing since the point when the ultimate controlling party starts to have the control.
If a subsidiary is acquired not under common control, its operation results and cash flow shall
be consolidated since the beginning of the consolidation period. In preparation of the
consolidated financial statements, adjustments shall be made to subsidiary’s financial
statements based on the fair value of its all identifiable assets, liability or contingent liability
on the acquisition date.
When the group partially disposes of the long –term equity investment in subsidiary without
losing the control over it, in the consolidated financial statements, the difference, between
disposals price and respective disposed value of share of net assets in the subsidiary since the
acquisition date or combination date, shall be adjusted for capital surplus or share premium,
no enough capital surplus, then adjusted for retained earnings.
When the group partially disposes of the long –term equity investment in subsidiary and lose
the control over it, in preparation of consolidated financial statements, remaining share of
interest in the subsidiary shall be remeasured on the date of losing control. Sum of the share
disposal consideration and fair value of remaining portion of shareholding minus the share of
the net assets in the subsidiary held based on the previous shareholding percentage since the
acquisition date or combination date, the balance of above is recognized as investment
gain/loss for the period and goodwill shall be written off accordingly. Other comprehensive
income relevant to share investment in subsidiary shall be transferred to investment gain /loss
for the period on the date of losing control.
When the group partially disposes of the long –term equity investment in subsidiary and lose
the control over it by stages, if all disposing transactions are bundled, each individual
transaction shall be seen as a transaction of disposal of a subsidiary by losing control. The
difference between the disposal price and the share of the net assets in the subsidiary held
before the date of losing control, shall be recognize as other comprehensive income until the
date of losing control where it is transferred into investment gain/ loss for the current period.
If the equity investment in the subsidiary is disposed of by stages through multiple
67
transactions until the control is lost, and it is not a bundled transaction, each transaction shall
be accounted for separately according to whether the control is lost.
8. Cash and cash equivalent
The cash listed on the cash flow statements of the Company refers to cash on hand and bank
deposit. The cash equivalents refer to short-term (normally with original maturities of three
months or less) and liquid investments which are readily convertible to known amounts of
cash and subject to an insignificant risk of changes in value.
9. Translation of foreign currency
（1） Foreign currency transaction
Foreign currency transactions are translated at the spot exchange rate issued by People’s Bank
of China (“PBOC”) on the 1st day of the month when the transactions are accounted initially.
At the balance sheet date, foreign currency monetary items should be converted into reporting
currency at the balance sheet date’s spot exchange rate. Exchange differences should be taken
into the current profits and losses except special foreign currency borrowings for construction
and producing assets which are qualifying for assets capitalization, should be capitalized.
Foreign currency non-monetary items, which are recorded in historical cost, should be still
recorded at the spot exchange rate when the transaction occurred and no change on reporting
currency amount. Foreign currency non-monetary items, which are measured at fair value,
should be recorded in the spot exchange rate at the date measuring the fair value and the
differences should be recognized as profit and loss from fair value changes and included in
the current profits and losses. Invested capital in foreign currency shall be converted into
reporting currency at FX rate at when the investment is received, and no foreign exchange
difference arises between capital received and monetary items.
10. Financial instruments
（1） Recognition and derecognition of financial instruments
The group shall recognize a financial asset or a financial liability when becoming party to the
contractual provisions of the instrument.
An entity shall derecognize a financial asset(or a part of it or a group of similar financial asset)
when, and only when: 1) the contractual rights to the cash flows from the financial asset
expire, or 2) the entity transfers contractual rights to receive the cash flows of a financial asset,
or assumes a contractual obligation to pay those cash flows received to the 3rd party in full
amount in time according to the ‘passing-through’ agreement and the entity substantially
transfers all the risks and rewards of ownership of the financial asset in nature, or the entity
neither transfers nor retains substantially all the risks and rewards of ownership of the
financial asset, but the entity has not retained control.
68
Financial liabilities shall be derecognized if the obligation of the liability is fulfilled,
cancelled or expired. An exchange between an existing borrower and lender of debt
instruments with substantially different terms shall be accounted for as an extinguishment of
the original financial liability and the recognition of a new financial liability. Similarly, a
substantial modification of the terms an existing financial liability shall be accounted for as an
extinguishment of the original financial liability and the recognition of a new financial
liability. The difference between the carrying amount of a financial liability extinguished and
the consideration paid, including any non-cash assets transferred or liabilities assumed, shall
be recognized in profit or loss.
A regular way purchase or sale of financial assets shall be recognized and derecognized, as
applicable, using trade date accounting or settlement date accounting.
（2） Classification and measurement of financial assets
At initial recognition, the group shall classify financial assets as measured at amortized cost,
fair value through other comprehensive income or fair value through profit or loss on the
basis of both the group’s business model for managing the financial assets and the contractual
cash flow characteristics of the financial asset. Only when the business model for managing
the financial assets is changed, the affected financial assets shall be reclassified.
In determining the business model, the group considers, among others, the way in which the
company evaluates and reports the performance of financial assets to key management
personnel, the risks affecting the performance of financial assets and the way in which they
are managed, and the way in which the relevant business managers are remunerated. In
assessing whether the objective is to collect contract cash flows, the group needs to make an
analytical judgment on the reasons, timing, frequency and value of the sale of the financial
assets before the maturity date.
In determining the contract cash flow characteristics, the group is required to determine
whether the contract cash flow is only the payment of principal and interest based on the
outstanding principal, (including the assessment of the time value of money correction,
judging any significant difference between it and the baseline cash flow/ for financial assets
containing early repayment characteristics, is required to determine whether the fair value of
early repayment features is very small).
Financial assets are measured at fair value at the initial recognition, but accounts receivable or
notes receivable arising from the sale of goods or provision of services, etc., do not contain a
significant financing component or do not consider the financing component of less than one
year, the initial measurement is based on the transaction price.
For financial assets that are measured at fair value, the related transaction costs are directly
included in current profit or loss, and those costs of other categories of financial assets are
69
included in their initial recognized amounts.
Financial assets subsequent measurement based on the classification
1) A financial asset measured at amortized cost
A financial asset shall be measured at amortized cost if both of the following conditions are
met: ①the financial asset is held within a business model whose objective is to hold financial
assets in order to collect contractual cash flows;②the contractual terms of the financial asset
give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding. The financial assets of this category include: monetary fund,
receivable, notes receivable and other receivables.
2) Debt instruments measured at fair value through other comprehensive income
A financial asset shall be measured at fair value through other comprehensive income if both
of the following conditions are met: ①the financial asset is held within a business model
whose objective is achieved by both collecting contractual cash flows and selling financial
assets and ②the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding.
The effective interest rate is applied to interest income. A gain or loss arising from a financial
asset measured at fair value through other comprehensive income, which is not part of
hedging relationship shall be recognized in other comprehensive income apart from interest
income, impairment loss and foreign exchange difference. When this type of financial assets
is derecognized, accumulated gain or loss previously in the other comprehensive income shall
be out of it and accounted into retained earnings when the financial asset is derecognized. The
financial assets of this category include: receivable financing.
3) Equity instruments measured at fair value through other comprehensive income
The group may make an irrevocable election for particular investments in equity instruments
that it would be measured at fair value through other comprehensive income, but once the
election is made, it is irrevocable. The group only recognizes the dividend (apart from the
dividend as investment cost pay back) into profit and loss and fair value movement
subsequently will be recognized into comprehensive income and no need for impairment
provision. When this type of financial assets is derecognized, accumulated gain or loss
previously in the other comprehensive income shall be out of it and accounted into retained
earnings when the financial asset is derecognized. The financial asset of this category is
equity instruments.
4) A financial asset measured as fair value through profit or loss
Apart from classified as the amortized cost financial assets and as fair value through other
comprehensive income financial assets, a financial asset is classified as fair value through
profit or loss. The group shall subsequently measure this financial asset at its fair value,
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except for hedging accounting, any gain or loss on FVTPL shall be accounted into profit and
loss. The financial assets of this category include: tradable financial asset other non-current
financial asset.
A financial asset shall be classified as fair value through profit or loss if it is recognized
contingent consideration through business combination, which is not under same control
situation.
（3） Classification, basis for recognition and measurement of financial liability
Except for the financial guarantee contract, commitments to provide a loan at a belowmarket
interest rate and financial liabilities that arise when a transfer of a financial asset does not
qualify for derecognition or when the continuing involvement approach applies, the group
shall initially classify all financial liabilities as it measured at amortized cost or financial
liabilities at fair value through profit or loss. For financial liabilities that are measured at fair
value, the related transaction costs are directly included in current profit or loss, and those
costs of other categories of financial assets are included in their initial recognized amounts.
Financial liabilities subsequent measurement based on the classification
1) Financial liabilities as it subsequently measured at amortized cost
Effective interest method is applied to financial liabilities as subsequently measured at
amortized cost
2) Financial liability as it measured at fair value through profit or loss
Financial liability measured at fair value through profit or loss including tradable financial
liability (derivative instrument of financial liability included) and designated as financial
liability measured at fair value through profit or loss. Tradeable financial liability (including
derivate instrument of financial liability) are subsequently measured at fair value. The net
gain or loss arising from changes in fair value are recorded in profit or loss for the period in
which they are incurred. Financial liability designated as it measured at fair value through
profit or loss shall be subsequently measured at fair value, except for changes in fair value
caused by changes in the group's own credit risk, which are recognized in other
comprehensive income, other changes in fair value are recognized in profit or loss for the
current period; The group recognizes all fair value changes (including the amount affected by
changes in its own credit risk) in profit or loss if the inclusion of changes in fair value
caused by changes in its own credit risk in other comprehensive income would cause or
widen the accounting mismatch in profit or loss for the current period.
（4） Financial instrument impairment
Based on expected credit loss, the group shall apply the impairment requirements for the
followings: ① a financial asset measured at amortized cost; ② debt investment measured
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at fair value and changes in fair value is through other comprehensive income; ③ lease
receivable; ④ a contractual asset and financial guarantee contract.
Expected credit loss is the weighted average of credit losses with the respective risks of a
default occurring as the weights. A credit loss herein is referred to as the present value, at
original effective rate, of the difference between the contractual cash flows that are due to the
group under the contract; and the cash flows that the Company expects to receive, that's the
present value of the total cash shortage. The group shall measure expected credit losses of a
financial instrument in a way that reflects: ①an unbiased and probabilityweighted amount
that is determined by evaluating a range of possible outcomes; ② the time value of money;
and ③reasonable and supportable information that is available without undue cost or effort at
the reporting date about past events, current conditions and forecasts of future economic
conditions.
Expected credit loss of financial instrument is assessed individually and portfolio. The group
assesses the expected credit loss based on the portfolio in accordance with the common
characteristics of credit risk which involves type of financial instrument, credit risk grade, and
age of trade receivables.
When assessing expected credit losses, the group considers all reasonable and supportable
information, including that which is forward-looking. In making these judgments and
estimates, the group extrapolates the expected changes in the debtor's credit risk based on
historical repayment data combined with factors such as economic policies, macroeconomic
indicators and industry risks. Different estimates may affect the provision for impairment, and
the provision already made may not equal the actual amount of impairment losses in the
future.
1) Impairment testing method of receivable and contract asset
For receivable, notes receivable and contract asset etc., which don’t contain significant
financing component and arise from sales of products and service provision, the group adopts
simplified method to account expected credit loss provision at an amount equal to the whole
lifetime expected credit losses.
For lease premium receivable, trade receivable containing significant financing component,
and contract asset, the group adopts simplified method to account expected credit loss
provision at an amount equal to the whole lifetime expected credit losses.
The group determines the expected credit loss of trade receivable on the basis of portfolios
with common characteristics of credit risk, which are considered by expected credit loss
measurement reflection, by reference to historical experience of credit loss and by
comparison of receivable past due days/ receivable age with default risk rate, unless the single
credit loss is separately recognized for contractual payments that is significant in amount and
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credit impaired. If certain client is significant different from others in terms of credit risk
characteristics, or the client’s credit risk has significantly increased, such as experiencing
severe finance difficulty, its expected credit loss is obviously higher than it to be at
accounting age, the group will make separate credit loss provision for this client’s receivable.
① Portfolio category and recognition basis of receivable ( contract asset)
The group classifies accounts receivable (and contract assets) according to the similarity and
relevance of credit risk characteristics based on information such as age, nature of payments,
credit risk exposure, historical debt collection, etc. For accounts receivable (and contract
assets), the group determines that aging is the primary factor affecting its credit risk and
therefore, the group assesses its expected credit losses on the basis of aging portfolios. The
group calculates the overdue age based on the payment date agreed in the contract.
No expected credit loss is recognized for receivables from related party within consolidated
scope as the group assesses its credit risk is relatively low.
② Portfolio category and recognition basis of notes receivable
Portfolio category Expected credit loss accounting estimate policy
Lower credit risk assessed by the management, no
Bank acceptance note portfolio
expected credit loss recognition
Commercial acceptance note Same as receivables portfolio and provided for excepted
portfolio credit loss allowance based on expected credit loss rate
2) Impairment testing method of debt investment, other debt investment, loan commitments
and financial guarantee contracts
With the exception of financial assets (such as debt investments, other debt investments), loan
commitments and financial guarantee contracts for which the simplified measurement method
is adopted above, the group adopts the general method (three-stage method) for the provision
of expected credit losses. At each balance sheet date, the group assesses whether its credit risk
has increased significantly since the initial recognition, and if the credit risk has not increased
significantly since the initial recognition, in the first stage, the group measures the loss
provision at an amount equivalent to the expected credit loss over the next 12 months and
calculates interest income based on the carrying balance and effective interest rate; If the
credit risk has increased significantly since the initial recognition but no credit impairment
has occurred, in the second stage, the group measures the loss provision at an amount
equivalent to the expected credit loss over the entire duration and calculates interest income
based on the carrying balance and effective interest rate; If credit impairment occurs after
initial recognition, in the third stage, the group measures the loss provision at an amount
equivalent to the expected credit loss over the entire duration and calculates interest income at
amortized costs and effective interest rates. For financial instruments with only low credit risk
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at the balance sheet date, the group assumes that their credit risk has not increased
significantly since initial recognition
The whole life expected credit loss refers to the expected credit loss caused by all possible
default events during the whole expected life of the financial instrument. Expected credit
losses over the next 12 months are expected credit losses resulting from defaults on financial
instruments that may occur within 12 months after the balance sheet date (or if the expected
duration of the financial instrument is less than 12 months) and are part of the overall
expected credit losses over the life of the financial instrument.
Criteria of significant increase in credit risk and definition of credit impaired assets are
disclosed on Note X.1
（5） Recognition and measurement of transfer of financial assets
A financial asset is derecognized when the financial asset has been transferred together with
substantial all risks and rewards to the transferee. A financial asset can not be derecognized
when the substantial all risks and rewards to the financial asset has been retained. When the
all risks and rewards of the financial asset are neither transferred nor retained, but the group
has given up its control of the financial asset, the financial asset shall be derecognized and
recognize the asset and liability originated. Where control of the financial asset is not
relinquished, the relevant financial asset shall be recognized according to the extent to which
it continues to be involved in the transferred financial asset, and the relevant liability shall be
recognized accordingly.
In the case where the financial asset as a whole qualifies for the derecognition conditions, the
difference between the carrying value of transferred financial asset at the derecognition date
and the sum of the consideration received for transfer and the accumulated amount of changes
in fair value in respect of the amount of partial derecognition ( financial assets involved in
transfer must qualify the following conditions: ① the financial asset is held within a
business model whose objective is not only for collecting contractual cash flows but also for
sale; ②the contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest based on the principal amount outstanding) ,
that was previously recorded under other comprehensive income is transferred into profit or
loss for the period.
In the case where only part of the financial asset qualifies for derecognition, the carrying
amount of financial asset being transferred is allocated between the portions that to be
derecognized and the portion that continued to be recognized according to their relative fair
value. The difference between the amount of consideration received for the transfer and the
accumulated amount of changes in fair value that was previously recorded in other
comprehensive income for the asset partially qualified for derecognition (financial assets
involved in transfer must qualify the following conditions:① the financial asset is held
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within a business model whose objective is not only for collecting contractual cash flows but
also for sale; ; ②the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest based on the principal amount
outstanding ) and the above-mentioned allocated carrying amount is charged to profit or loss
for the period.
Where the assets continue to be involved by providing financial guarantees for the transferred
financial assets, the assets that continue to be involved in the same form are recognized at the
lower of the carrying value of the financial assets and the amount of the financial guarantees.
Financial guarantee amount means the maximum amount of consideration received that will
be required to be repaid.
（6） Distinguish between financial liability and equity instrument and accounting
Financial liability and equity instrument shall be distinguished in accordance with the
following standards: ① if the group cannot unconditionally avoid paying cash or financial
asset to fulfil a contractual obligation, the contractual obligation is qualified or financial
liability. For certain financial instrument, although there are no clear terms and conditions to
include obligation of paying cash or other financial liability, contractual obligation may
indirectly be formed through other terms and conditions. ② the group’s own equity
instrument shall also be considered whether it is the substitute of cash, financial asset or it is
the remaining equity, after the issuer deducts liability, enjoyed by the equity holder , if it must
or can be used to settle a financial asset. If the former, the instrument is a financial liability of
the issuer, otherwise it is an equity instrument of the issuer. In certain circumstances, financial
instrument contract is classified as financial liability, if financial instrument contract specifies
the Company must or can use its own equity to settle the financial instrument, the contractual
amount of right or obligation equals to that of the numbers of own equity instrument available
or to be paid multiplied by fair value when settling, nevertheless the amount is fixed, or
varied partially or fully based on the its own equity’s market price(such as interest rate,
certain commodity’s or financial instrument’s price variance).
When classifying a financial instrument (or its component) in the consolidated statements, the
group takes all terms and conditions agreed by the its member and instrument holder into
consideration. If the group because of the instrument, as a whole, bears settlement obligation
by paying cash, other financial asset or other means resulted in financial liability, the
instrument shall be classified as financial liability.
（7） Derivative financial instrument
The group uses derivative financial instruments such as foreign exchange forward contracts,
commodity forward contracts and interest rate swaps to hedge exchange rate risk, commodity
price risk and interest rate risk respectively. Derivative financial instruments are initially
measured at their fair value on the date the derivative transaction contract is signed, and are
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subsequently measured at their fair value. A derivative instrument with a positive fair value is
recognized as an asset and a negative fair value is recognized as a liability.
Except hedging accounting, all gain or loss from the FV movement of derivative instrument
shall be recognized in the income statement.
（8） Financial asset and financial liability offset
Financial asset and financial liability shall be presented in the balance sheet separately and
cannot be offset, unless the following conditions are all met: ①the Company has the legal
right to recognized offset amount and the right is enforceable. ②the Company plans to
receive or a legal obligation to pay cash at net amount.
11. Inventories
Inventories are raw material, low-valuable consumable, goods on transit, working-in-progress,
finished goods, and cost to fulfil the contract etc.
The inventories are processed on perpetual inventory system, and are measured at their actual
cost on acquisition. Weighted average cost method is taken for measuring the inventory
dispatched or used. Low value consumables and packaging materials is recognized in the
income statement by one-off method.
At the balance sheet date, inventory is measured at the lower of cost and net realizable value.
If the cost of the inventory is higher than its net realizable value, a provision is made for the
decline in the price of the inventory and it is accounted in the current profit or loss. Net
realizable value is the amount of the estimated selling price of inventory in daily activities
less the estimated costs to be incurred at completion, estimated selling expenses and related
taxes.
Impairment provision for the group's raw materials/goods in stock/WIP/ cost to fulfil the
contract is made on an individual inventory item, and when determining its net realizable
value, the inventory of goods in stock and materials used for sale are determined at the
estimated selling price of the inventory less estimated selling expenses and related taxes;
Inventory of materials held for use in production is determined at the estimated selling price
of the finished goods produced less the estimated costs to be incurred up to completion,
estimated selling expenses and
12. Contract asset and contact liability
(1) Contract asset
Contract asset is an entity’s right to consideration in exchange for goods or services that the
entity has transferred to a customer when that right is conditioned on something other than the
passage of time. For example, the group sold two goods that can be clearly distinguished to
the client, then the group has the right to consideration in exchange of the goods because one
76
of the goods are delivered, but the consideration’s collection is conditioned on the other
goods delivery, in this case, the right to consideration shall be recognized as contract asset.
Expected credit loss recognition of contract asset is referred to the Note III、10 Provision for
impairment of financial assets.
(2) Contract liability
An entity’s obligation to transfer goods or services to a customer for which the entity has
received consideration (or the amount is due) from the customer. If a customer pays
consideration, or the group has a right to an amount of consideration that is unconditional
before the group transfers a good or service to the customer, the group shall present the
contract as a contract liability when the payment is made or the payment is due (whichever is
earlier).
13. Assets relevant to contract cost
(1) Assets recognition methods in relation to contract cost
Assets relevant to contract cost in the group include cost to fulfill the contract and cost to
obtain a contract. Cost to fulfill the contract is presented under inventory and other
non-current assets. Cost to obtain a contract is presented under other current assets and other
non-current assets.
If the costs incurred in fulfilling a contract with a customer are not within the scope of
another Standard such as inventory , fixed assets or intangible assets , an entity shall
recognize an asset from the costs incurred to fulfill a contract only if those costs meet all of
the following criteria: the costs relate directly to a contract or to an anticipated contract,
including direct labor, direct materials and overheads which is clearly stated to be borne by
the client and any other cost in line with the contract; the costs enhance resources of the group
that will be used in performance obligations in the future; and the costs are expected to be
recovered.
An asset as the incremental costs of obtaining a contract with a customer shall be recognized
if the group expects to recover those costs. The group may recognize the incremental costs of
obtaining a contract as an expense when incurred if the amortization period of the asset t is
one year or less. The incremental costs of obtaining a contract are those costs that the group
incurs to obtain a contract with a customer that it would not have incurred if the contract had
not been obtained (for example, a sales commission). Other expenses incurred in order to
obtain a contract rather than the incremental cost, and expected to be recovered (regardless of
whether the contract is obtained such as travelling expenses) shall be recognized as an
expense when incurred, unless those costs are explicitly chargeable to the customer.
(2) Amortization of asset relevant to contract cost
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An asset recognized in accordance with contract cost shall be amortized on a systematic basis
that is consistent with the transfer to the customer of the goods or services to which the asset
relates.
(3) Impairment of asset relevant to contract cost
If the carrying value of the group's assets related to the contract cost is higher than the
following two differences, the group will make the impairment provision for the excessive
part and recognize the asset impairment loss: ① The remaining consideration that the group
is expected to obtain due to the transfer of the commodities related to the asset; ② Estimate
the costs to be incurred for the transfer of the relevant goods
14. Long-term equity investment
Long term equity investments are the equity investment in subsidiary, in associated company
and in joint venture.
(1) Judgement on control, joint control and significant influence
Equity investments in which the group has a significant impact on the investee are
investments in associates.
Significant influence refers to having the power to participate in the decision-making of the
financial and operational policies of the investee, but not being able to control or jointly
control the formulation of these policies with other parties. Significant influence exists when
the entity directly or indirectly owned 20% or more but less than 50% voting shares in the
investee, unless there is explicit evidence that the company cannot participate in the
production and operation decisions of the investee or have control over the investee.
When having less than 20% voting shares, the group’s significant influence still exists if the
followings are taken into accounts: representation on the board of directors or equivalent
governing body of the investee, participation in financial or operating activities
policy-making processes, material transactions between the investor and the investee,
interchange of managerial personnel or provision of essential technical information etc.
The group’s joint venture investment is an equity investment whereby the parties have jointly
control over it and have rights to the net assets of the investee. Joint control is the
contractually agreed sharing of control of an arrangement, which exists only when decisions
about the relevant activities require the unanimous consent of the parties sharing control. The
group’s judgement on joint control is based on the joint arrangement that all participants or
combinations of participants collectively control the arrangement and that decisions relating
to the activities of the arrangement must be made with the unanimous consent of those
participants who collectively control the arrangement.
(2) Accounting
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The group initially measures the long-term investment in line with the initial cost for
acquiring the investment.
The initial investment cost for long-term equity investment acquired through business
combination under common control, is the carrying amount presented in the consolidated
financial statements of the share of net assets at the combination date in the acquired
company. If the carrying amount of net assets at the combination date in the acquired
company is negative, investment shall be recognized at zero.
If long-term equity investment is acquired through business combination not under common
control, initial investment cost shall be the combination cost. If the equity investment of
investee not under common control is acquired by stages and it’s not a bundled transaction,
the carrying amount of the equity investment held previously plus newly increased investment
cost are taken as the initial investment cost.
Apart from the long-term equity investments acquired through business combination, the cost
of investment for the long-term equity investments acquired by cash payment is the amount of
cash paid, relevant direct expense, tax and other necessary expenses for the investment. For
long-term equity investment acquired by issuing equity instruments, the cost of investment is
the fair value of the equity instrument issued.
The Company adopts cost model for investment in subsidiary on separate financial statement.
Under cost model, the long-term equity investment is measured at initial investment cost.
When more investment is added, it shall increase the carrying amount of investment by
adjusting the fair value of additional investment and relevant transaction expenses. Cash
dividend or profit declared by investee shall be recognized as investment gain/loss for the
period based on the proportion share in the investee.
The Company adopts equity method for investment in joint venture and affiliate. Under
equity method, if the initial investment cost is greater than the share of fair value of the
identifiable net assets in the investee, the initial investment cost of long-term equity
investment is no need to be adjusted; If the initial investment cost is less than the share of fair
value of the identifiable net assets in the investee , the difference shall be recorded into the
current profit and loss, and the cost of long-term equity investment shall be adjusted at the
same time.
Long-term equity investment subsequently, under equity method, shall be adjusted for it
carrying amount according to the share of equity increase or decrease in the investee. The
Company shall recognize its share of the investee’s net gain or losses after the investee’s net
profit adjustment, based on the fair value of the investee’s individual identifiable assets at
the acquisition date, after making appropriate adjustments thereto in conformity with the
accounting policies and accounting period, and offsetting the unrealized profit or loss from
the inter-group transactions, not constituting the business, between the entity and its
79
associates and joint ventures according to the shareholding attributable to the group (full
amount of loss shall be recognized if the inter-group transaction is impairment loss). The
group recognizes net losses incurred by investee to the extent that the carrying value of
long-term equity investments and other long-term interests substantially constituting net
investments in investee are written down to zero, except where the group is obliged to bear
additional losses.
The difference between the book value of long-term equity investment and actual acquisition
cost shall be recognized in the gain or loss of investment when the long-term equity
investment is disposed of.
For long-term investments accounted under equity method, other comprehensive income
recorded shall be accounted on the same basis as the investee directly disposing of related
assets or liability when equity method is not used any longer. The movements of
shareholder’s equity, other than the net profit or loss, other comprehensive income and profit
distribution previously recorded in the shareholder’s equity of the Company are recycled to
investment income for the period on disposal.
If the remaining equity after the partially disposal is still accounted for under the equity
method, the relevant other comprehensive income previously recognized under the equity
method, is treated on the same basis as the direct disposal of the relevant assets or liabilities
by the investee and is carried forward on a proportional basis, and the owner's equity, which
is apart from net profit and loss, other comprehensive income and profit distribution of the
investee, shall be recognized and proportionally transfers to current investment income.
Where the entity has no longer joint control or significant influence in the investee company
as a result of partially disposal of the investment, the remaining investment will be accounted
for in line with the Recognition and Measurement of Financial Instruments Standard -No 22
of Accounting Standards for Business Enterprises(No7 Caikuai [2017]), and the difference
between the fair value of remaining investment at the date of losing joint control or
significant influence and its carrying amount shall be recognized in the profit or loss for the
year.
Where the entity has no longer control over the investee company as a result of partially
disposal of the investment, the remaining investment will be changed to be accounted for
using equity method providing remaining joint control or significant influence over the
investee company. The difference between carrying amount of disposed investment and
consideration received actually shall be recognized as investment gain or loss for the period,
and investment shall be adjusted accordingly as if it was accounted for under equity model
since acquisition. Where the entity has on longer joint control or significant influence in the
investee as a result of disposal, the investment shall be accounted for in accordance with the
Recognition and Measurement of Financial Instruments Standard -No 22 of Accounting
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Standards for Business Enterprises(No7 Caikuai [2017]), and difference between the carrying
amount and disposal consideration shall be recognized as investment gain or loss for the
period, and the difference between the fair value of remaining investment at the date of losing
control and its carrying amount shall be recognized in the profit or loss for the year.
15. Investment property
Investment property is held to earn rentals or for capital appreciation or both and includes
property, building and use right of land. They are measured at cost model.
Investment property is depreciated or amortized on straight line basis and its expected useful
life, net residual value rate and annual depreciation rate is as follows:
Useful life Estimated net residual value Annual
Category
(years) rate (%) depreciation rate
Use right of land 50 0 2
Property and Buildings 40 3/10 2.25-2.43
16. Fixed assets
Recognition criteria of fixed assets: defined as the tangible assets which are held for the
purpose of producing goods, rendering services, leasing or for operation & management, and
have more than one year of useful life.
Fixed assets shall be recognized when the economic benefit probably flows into the group and
its cost can be measured reliably. Fixed assets include: building, machinery, transportation
equipment, electronic equipment and others.
All fixed assets shall be depreciated unless the fixed assets had been fully depreciated and are
still being used and land is separately measured. Straight-line depreciation method is adopted
by the group. Estimated net residual value rate, useful life, depreciation rate as follows:
Useful life Estimated net residual Annual depreciation
No Category
(years) value rate (%) rate (%)
1 Property and Buildings 20-40 3、5、10 2.25-4.85
2 Machinery equipment 5-22 0.5-1、3、5、10 4.09-19.90
3 Transportation equipment 5-12 1、3、5、10 7-33.33
4 Electronic equipment &others 3-15 0-1、3、5、10 6-33.33
The group should review the estimated useful life, estimated net residual value and
depreciation method at the end of each year. If any change has occurred, it shall be regarded
as a change in the accounting estimates.
17. Construction in progress
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The cost of construction in progress is determined according to the actual construction
expenditure, including the necessary construction expenditure incurred during the
construction period, the capitalized borrowing cost and other related expenses before the
construction reaches the condition expected for use.
Constructions in progress are transferred to fixed assets based on the construction budget and
actual costs on the date when completing and achieving estimated usable status, and the fixed
assets should be depreciated in the next month. Adjustment will be made upon confirmation
of their actual values after implementing the completion and settlement procedures.
The construction in progress shall be transferred to fixed assets when it reaches the expected
usable state, and the criteria are as follows:
Items Criteria of transferring to FA
Property and Buildings Earlier of actual starting of use and completion of inspection
Machinery equipment Earlier of actual starting of use and completion of installation / inspection
18. Intangible asset
The group’s intangible assets include use right of land, patents, non-patented technologies and
others. They are measured at actual cost at acquisition day. For acquired assets, the actual cost
is measured at actual price paid and relevant other expenses. Invested intangible asset shall be
measured at actual cost as contracted or agreed value, however fair value will be taken if the
contracted or agreed value is not fair.
(1) Useful life and the basis for recognition, estimation, amortization method or review
procedure
Use right of land shall be amortized evenly within the amortization period since the remised
date. Patents, technologies and other intangible assets are amortized over the shortest of their
estimated useful life, contractual beneficial period and useful life specified in the law.
Amortization charge is included in the cost of assets or expenses, as appropriate, for the
period according to the usage of the assets. At the end of the year, for definite life of
intangible assets, their estimated useful life and amortization method shall be assessed. Any
change shall be treated as change on accounting estimate.
(2) The scope and accounting of research and development
The group separates the expenditure on internal research and development projects into
research phase expenditure and development phase expenditure. At research phase,
expenditure are expenses directly relevant to research activity, including R&D employee’s
salary, materials, depreciation, technology cooperation cost and assessment testing fees. At
development phase, expenses can be capitalized only when meeting the following conditions:
(a)the technical feasibility of completing the intangible asset so that it will be available for
82
use or sale.
(b)its intention to complete the intangible asset and use or sell it.
(c)how the intangible asset will generate probable future economic benefits. Among other
things, the entity can demonstrate the existence of a market for the output of the intangible
asset or the intangible asset itself or, if it is to be used internally, the usefulness of the
intangible asset.
(d)the availability of adequate technical, financial and other resources to complete the
development and to use or sell the intangible asset.
(e)its ability to measure reliably the expenditure attributable to the intangible asset during its
development.
Any expenditure not qualifying for the above conditions shall be accounted into profit and
loss account.
The projects expenditure will go to the development stage and start to be capitalized after
meeting the above conditions, and passing the technical feasibility and economic feasibility
studies, and being approved after evaluation.
19. Impairment of long-term assets
The group assesses whether there is any indication that long-term equity investment,
investment property under cost model, fixed assets, construction in progress, right-of-use
asset and intangible assets with definite useful life may be impaired. If there is any indication
that an asset may be impaired, the asset will be tested for impairment. Goodwill and
intangible asset with infinite useful life and development cost not reaching available for use
status, are tested for impairment annually no matter there is any indication of impairment or
not.
(1) Non-current asset impairment excluding financial asset (expect goodwill)
When testing the impairment, the group recognized the recoverable amount of an asset, which
the higher of its fair value less costs to sell and the present value of the future cash flows
expected to be derived from the asset. After impairment test, any difference of carrying
amount over its recoverable amount shall be recognized as impairment loss.
The group estimates recoverable amount based on an individual asset. If it is not possible to
estimate the recoverable amount of an individual asset, the recoverable amount is determined
on the basis of the asset groups or asset portfolio to which the asset belongs. Asset portfolio is
determined based on whether the major cash inflow generated by the asset group is
independent from the cash inflow of other assets or the asset portfolio.
Net amount which FV less disposal cost is reference to the agreed sale price or observable
market price for similar asset within the arm length transaction. When estimating the present
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value of future cash flows, management must estimate the expected future cash flows of the
asset or group of assets and select an appropriate discount rate to determine the present value
of future cash flows.
(2) Goodwill impairment
The group allocates the carrying value of the goodwill generated from the business
combination to the relevant asset group or to the relevant asset group combination which is
difficult to allocate to the relevant asset group，in a reasonable way from the date of purchase.
When conducting impairment tests on goodwill contained within the related asset group or
asset group combination, if there are signs of impairment in the asset group or asset group
combination related to goodwill, the impairment test shall firstly be conducted on the asset
group or asset group combination excluding goodwill, and the recoverable amount shall be
calculated and compared with the relevant carrying value so to recognize the corresponding
impairment loss; Then, an impairment test is conducted on the asset group or asset group
combination containing goodwill to compare the carrying value with the recoverable amount.
If the recoverable amount is lower than the carrying value, the impairment loss amount is first
offset against the carrying value of goodwill allocated to the asset group or asset group
combination, and then offset the carrying value of the asset group and asset group
combination based on the proportion of the carrying value of other assets in the asset group or
asset group combination without goodwill.
The methodology, parameters and assumptions of the goodwill impairment test are referred in
Notes VI.19.
Once the impairment loss on the assets is recognized, it can not be reversed in a subsequent
period.
20. Long-term prepaid expense
The group's long-term prepaid expense refers to landscape fees, renovation &decoration
expenses and other expenses paid and should be allocated over 1year.It will be amortized
evenly within its beneficial period. The remaining unamortized expense should be charged
into income statement if long-term prepaid expense can not bring the beneficial inflows.
Landscape fees will be amortized for 10 years and renovation& decoration fees will be
amortized for 5-10 years.
21. Employee benefits
Employee’s benefit comprises short-term benefit, post-employment benefit, termination
benefit and other long-term employee’s benefit.
Short-term benefit includes salary, bonus, allowance, welfare, social insurance, housing funds,
labor union expense, staff training expense, during the period in which the service rendered
by the employees, the actually incurred short term employee benefits shall be recognized as
84
liability and shall be recognized in P&L or related cost of assets based on benefit objective
allocated from the service rendered by employees.
Post-employment benefits include the basic pension scheme and unemployment insurance etc.
Based on the risk and obligation borne by the Company, post-employment benefits are
classified into defined contribution plan and defined benefit plan. For defined contribution
plan, liability shall be recognized based on the contributed amount made by the Company to
separate entity at the balance sheet date in exchange of employee service for the period and it
shall be recorded into current profit and loss account or relevant cost of assets in accordance
with beneficial objective.
Other long-term employee’s benefit refers to all other employee benefits other than short-term
benefit, post-employment benefit and termination benefit.
22. Provision
When the Company has transactions such as commitment to externals, discounting the trade
acceptance note, unsettled litigation or arbitration which meets the following criterion,
provision should be recognized: It is the Company's present obligation; carrying out the
obligation will probably cause the Company's economic benefit outflow; the obligation can
be reliably measured.
Provision is originally measured on the best estimate of outflow for paying off the present
obligations. When determining the best estimate, need to consider the risk, uncertainty, time
value of monetary relevant to contingent items. The group needs to review the present best
estimate and accordingly adjust the carrying value of the provision account.
23. Revenue recognition and measurement
The group recognizes revenue when it has fulfilled its contractual performance obligations, i.e.
when the customer has obtained control of the relevant goods or services. Control right of
goods or services refers to the ability to direct the use of, and obtain substantially all of the
remaining benefits from, the asset.
If the contract between the group and the customer meets the following five conditions at the
same time, the group has fulfilled the performance obligation when the customer obtains the
control of the relevant goods or services, and the revenue is recognized:
1) the parties to the contract have approved the contract and promised to fulfill their own
obligations;
2) the contract specifies the rights and obligations of parties related to the transferred
commodities;
3) the contract has explicit payment terms related to the transferred goods;
4) the contract has commercial substance, where the performance of the contract will change
85
the company's future cash flow risk, time distribution or amount;
5) the consideration to which the company is entitled as a result of the transfer of goods to the
customer is likely to be recovered.
When the group transfers control of a good or service over time, it satisfies a performance
obligation and recognizes revenue over time only if one of the following criteria is met,
otherwise it shall be the performance obligation at a point in time.
(1) the customer simultaneously receives and consumes the benefits provided by the entity’s
performance as the entity performs
(2) the group’s performance creates or enhances an asset (for example, work in progress)
that the customer controls as the asset is created or enhanced
(3) the group’s performance does not create an asset with an alternative use to the entity and
the entity has an enforceable right to payment for performance completed to date
(1) Revenue policy from sales
The group’s revenue mainly includes income from sale of goods and installation of the whole
set of refrigeration engineering project.
Based on the actual situation, the group recognizes the revenue as the followings；
1) Domestic sales: the sales contract with customers generally includes the performance of
obligation of transferring goods. The group recognizes the revenue at the time when the
arrival acceptance is completed by customers, having taken all followings into consideration:
present debt collection right entitled to the sales of goods, the transfer of the main risks and
rewards in the ownership of the goods, the transfer of the legal ownership entitled to the
goods, the transfer of physical assets, the acceptance of goods by customers.
2) Export sales: the group will recognize the sales revenue after completing the customs
declaration and export procedures.
Revenue from installation of the whole set of refrigeration engineering project. In the
refrigeration installation contract between the group and the customer, since the equipment
sales and installation services cannot be distinguished separately, the entire project contract is
regarded as a single performance obligation, and the revenue of the single performance
obligation is recognized at the completion of the customer acceptance. when a performance
obligation over time is satisfied, revenue shall be recognized within the contract term
according to the performance progress, which is determined by the percentage of the
cumulative actual cost to expected total contract cost. When the performance progress can not
be estimated reasonably, the group recognizes the revenue to the extent where the already
incurred cost can be compensated until the performance progress can be decided.
(2) Determining and allocating the transaction price
86
If the contract includes two or more performance obligations, at the inception date of contract,
the group shall allocate the transaction price to each performance obligation identified in the
contract on a relative standalone selling price ratio basis and measure the revenue at the
allocated transaction price to each performance. If any solid evidence indicates that contract
discount is only relevant to one or some (not all) performance obligations, the discount shall
be allocated into the one or these performance obligations.
An amount of consideration can vary because of cash discounts, price guarantee. The group
determines the best estimate of the variable consideration in line with the expectation or the
amount that most probably incurred, but includes, in the transaction price, the variable
consideration not exceeding the amount that is highly unlikely to result in a material reversal
of cumulative revenue recognized when the relevant uncertainty is eliminated.
The group accounts for consideration payable to a customer as a reduction of the transaction
price and, therefore, of revenue unless the payment to the customer is in exchange for a
distinct good or service. Accordingly, the revenue shall be recognized at the later of the
revenue recognition and the consideration paid to a customer.
For sales with a right of return, the group recognizes the revenue for the consideration
expected to have the right to receive arising from transferring the goods to customers when
the customer receives the control right over the relevant goods, and recognizes the expected
refund amount as provision. At the same time, receivable of return cost, as an asset, shall be
recognized for the carrying value of the returned goods when it is expected to be transferred
less expected cost for getting it back (including decline in value) and net amount of the above
asset cost shall be carried over to the cost. At every balance sheet date, the group will reassess
the future sales returns and remeasure the above assets and liabilities.
Where a significant financing component exists in the contract, the transaction price shall be
measured at the assumed price that the payment is made by cash when the client receives the
control right of goods or services. The difference between the promised consideration and the
determined transaction price shall be amortized within the contract period using effective
interest rate, and it is the discounting rate at which the dominated price of the contract
consideration is discounted to the cash price.
According to the agreement or the regulation etc., the group provide warranty for the goods
sold and it is the quality assurance for promising the goods are in commodity with the agreed
standards and shall be accounted for as Note III、22 provision.
24. Government grants
Government grant shall be recognized only when all attached conditions are met and the grant
is possibly received. Where a government grant is in the form of a transfer of monetary asset,
it is measured at the amount received. Where a government grant is made on the basis of
87
fixed amount or conclusive evidence indicates relevant conditions for financial support are
met and expect to probably receive the fund, it is measured at the amount receivable. Where a
government grant is in the form of a transfer of non-monetary asset, it is measured at fair
value. If fair value cannot be determined reliably, it is measured at a nominal amount of
RMB1 Yuan.
Assets-related government grant is the government fund obtained by the group for the
purpose of long-term assets purchase and construction or establishment in the other forms.
Income-related grants are the grant given by the government apart from the assets-related
grants. If no grant objective indicated clearly in the government documents, the group shall
judge it according to the principle mentioned above. If the grant is difficult to be separated, it
shall be considered as income-related grant as a whole.
Assets-related government grants are recognized as deferred income, which shall be evenly
amortized to profit or loss over the useful life of the related asset. Any assets are sold,
transferred, disposed of or impaired earlier than their useful life expired date, the remaining
balance of deferred income which hasn’t been allocated shall be carried forward to the
income statement when the assets are disposed of.
Income-related government grants that is a compensation for related expenses or losses to be
incurred in subsequent periods are recognized as deferred income and credited to the relevant
period when the related expenses are incurred. Government grants relating to compensation
for related expenses or losses already incurred are charged directly to the profit or loss for the
period. Government grants related to daily business, shall be recognized as other income in
accordance with business nature or offsetting related expenses, otherwise, shall be recognized
as non-operating income or expenses.
25. Deferred tax assets and deferred tax liabilities
The deferred income tax assets or the deferred income tax liabilities should be recognized
according to the differences (temporary difference) between the carrying amount of the assets
or liabilities and its tax base and the difference between the carrying amount of tax base item
and its tax base.
Deferred tax liability shall be recognized for all taxable temporary difference apart from the
followings : (1) temporary differences arise from the initial recognition of goodwill or the
initial recognition of assets or liabilities arising from non-business combinations that do not
affect accounting profits or taxable income (or deductible losses); (2) The group is able to
control the timing of the reversal of taxable temporary differences related to investments in
subsidiaries, associates, and joint ventures, and such temporary differences are likely not to be
reversed in the foreseeable future.
The group recognizes deferred income tax assets for deductible temporary differences,
88
deductible losses, and tax deductions that are likely to be obtained to offset future taxable
income, except for the following situations: (1) the initial recognition of assets or liabilities
arising from non-business combination transactions where temporary differences do not affect
accounting profits or taxable income (or deductible losses); (2) Deductible temporary
differences related to investments in subsidiaries, associates, and joint ventures that cannot
simultaneously meet the following conditions: temporary differences are likely to be reversed
in the foreseeable future, and taxable income is likely to be obtained in the future to offset
deductible temporary differences.
The group recognizes deferred income tax assets for all unused deductible losses to the extent
that there is likely to be sufficient taxable income to offset the deductible losses. The
management uses plenty of judgment to estimate the timing and amount of future taxable
income, combined with tax planning strategies, to determine the amount of deferred income
tax assets, which results in uncertainty.
On the balance sheet date, deferred income tax assets and deferred income tax liabilities are
measured at the applicable tax rate during the expected period of asset recovery or liability
settlement.
When the following conditions are met simultaneously, the group shall present the deferred
income tax assets and deferred income tax liabilities at the net amount after offsetting: The
group has the legal right to settle the current income tax assets and deferred income tax
liabilities at the net amount; Deferred income tax assets and deferred income tax liabilities are
related to the income tax levied by the same tax collection and management authority on the
same taxpayer or on different taxpayers. However, in the future, within the term when each
significant deferred income tax asset and deferred income tax liability to be reversed, the
involved taxpayers intend to settle the current income tax assets and liabilities on a net basis
or acquire assets and settle debts simultaneously.
26. Lease
(1) Lease identification
Lease: A contract, or part of a contract, that conveys the right to use an asset (the underlying
asset) for a period of time in exchange for consideration.
At inception of a contract, the group shall assess whether the contract is, or contains, a lease.
A contract is, or contains, a lease if the contract conveys the right to control the use of an or
many identified assets for a period of time in exchange for consideration.
For a contract that is, or contains several leases, the group shall separate the contract and
account each lease separately. The group shall account for each lease component separately
from non-lease components of the contract if the contract contains lease and non-lease
components. Each leasing part is accounted for according to the leasing standards, while the
89
non-leasing part is accounted for according to other applicable accounting standards. If the
contract includes both leasing and non-leasing parts, the group, as the lessor, will split the
leasing and non-leasing parts and conduct accounting treatment separately. Each leasing part
will be accounted for according to the leasing standards, while the non-leasing part will be
accounted for according to other applicable accounting standards. As the lessee, the group
chooses not to separate the lease and non-lease, and joins each leased part and its non- leased
parts separately into a lease, accounting treatment shall be carried out in accordance with
leasing standards; However, if the contract includes embedded derivative instruments that
should be split, the group will not merge them with the leasing portion for accounting
treatment.
(2) As a leasee
1) Recognition
At the commencement date, the group as a lessee shall recognize a right-of-use asset and a
lease obligation except short-term lease and low value asset lease.
Right-of-use assets represents a lessee’s right to use an underlying asset for the lease term,
and is initially measured at cost.
The cost of the right-of-use asset shall comprise:
① the amount of the initial measurement of the lease liability,
② any lease payments made at or before the commencement date, less any lease incentives
received, which is the incremental cost for the lease
③ any initial direct costs incurred by the lessee which is the incremental cost
④ an estimate of costs to be incurred by the lessee in dismantling and removing the
underlying asset, restoring the site on which it is located or restoring the underlying asset to
the condition required by the terms and conditions of the lease, unless those costs are incurred
to produce inventories. Where the group remeasures the lease liability in accordance with the
relevant provisions of the leasing standard, the carrying value of right-of-use asset is adjusted
accordingly.
The group shall follow the following principles when determining the depreciation life of the
right-of-use asset: if the ownership of the leased asset can be reasonably determined at the
end of the lease term, depreciation shall be calculated and deducted during the remaining
service life of the leased asset; Where it is not certain that the ownership of the leased asset
can be acquired at the end of the lease term, depreciation shall be calculated at the shorter of
the lease term and the remaining service life of the leased asset. The depreciation amount
shall be accounted into cost of assets or profit and loss account.
At the commencement date, a lessee shall measure the lease liability at the present value of
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the lease payments that are not paid at that date.
The lease payments included in the measurement of the lease liability comprise the following
payments for the right to use the underlying asset during the lease term that are not paid at the
commencement date: ① fixed payments (including in-substance fixed payments) less any
lease incentives receivable;② variable lease payments that depend on an index or a rate,
initially measured using the index or rate as at the commencement date;③ the exercise price
of a purchase option if the lessee is reasonably certain to exercise that option; ④ payments
of penalties for terminating the lease, if the lessee will certainly exercise an option to
terminate the lease during the lease term;⑤ amounts expected to be payable by the lessee
under residual value guarantees.
When calculating the present value of the lease payments, interest rate implicit in the lease
shall be used. If the rate cannot be readily determined, the group shall use the lessee’s
incremental borrowing rate. Interest on the lease liability in each period during the lease term
shall be calculated based on a constant periodic rate of interest, and be recognized as in profit
or loss unless its capitalization.
After the lease commencement date, the group increases the carrying amount of lease liability
when recognizing the interest on lease liability and; decreases the carrying amount of lease
liability when making lease payment. The group remeasures the lease liability in accordance
with the present value of revised lease payment, when the followings incur: ①change of
in-substance fixed payments (subject to original discounting rate) ② change of amounts
expected to be payable under residual value guarantees(subject to original discounting rate)
③ change of an index or a rate used for future lease payments(subject to revised discounting
rate) ④ change in assessment of a buy option(subject to revised discounting rate) ⑤
change in assessment of a renew option or termination option or actual situation(subject to
revised discounting rate).
2) Short-term lease and low value asset lease
The group has chosen not to recognize the right-of-use asset and lease liability for short-term
lease (lease term less than 12 months) and low value asset (30,000 Yuan) when it is single
leased new asset. In this case, lease payment will be accounted directly in profit or loss or on
the straight-line basis in profit or loss.
3) Sales and lease back
The group, as a seller and a lease within the sales and lease back transaction, assesses whether
the transfer of the asset is a sale. If the transfer of assets is not a sale, the group shall continue
to recognize the transferred assets and at the same time recognize a financial liability equal to
the transfer income (Note VI. 34 lease). If the transfer of assets is a sale, the group shall
measure the right-of-use asset arising from the leaseback at the proportion of the previous
91
carrying amount of the asset that relates to the right of use retained by the group. Accordingly,
the group shall recognize only the amount of any gain or loss that relates to the rights
transferred to the buyer-lessor.
(3) As a lessor
The group, as a lessor, classified it as a finance lease if it transfers substantially all the risks
and rewards incidental to ownership of an underlying asset unless an operating lease.
1) Financing lease
At the commencement date, the group shall recognize the lease payment receivable and
derecognize of finance lease asset. When initially measuring the lease payment receivable, net
lease investment value shall be used for the lease payment receivable.
Net lease investment value equals to the any residual value guarantees plus the PV of undue
lease receivable discounted at the interest rate implicit in the lease. The group shall recognize
interest income over the lease term based on a constant periodic rate. The variable lease
payment obtained by the group related to operating leases, which are not included in the net
lease investment, shall be accounted for in the current profit and loss when actually incurred
2) Operating lease
Lease payment received shall be recognized as lease income on a straight-line basis within the
period.
The initial direct expenses incurred by the group in relation to operating leases are capitalized
to the cost of leasing the underlying asset and are recognized in profit or loss by instalments
over the lease period on the same basis as rental income. Variable lease payments made by the
group in relation to operating leases that are not included in lease collections are recognized
in profit or loss for the period when they are actually incurred.
The group shall account for a modification to an operating lease as a new lease from the
effective date of the modification, considering any received in advance or lease payments
receivable relating to the original lease as part of the lease payments receivable for the new
lease
27. Fair value measurement
The group measures investment property, derivative financial instruments and equity
instruments at fair value at each balance sheet date. Fair value refers to the price that market
participants can receive by selling an asset or can pay for transferring a liability in an orderly
transaction that takes place on the measurement date.
Assets and liabilities measured or disclosed at fair value in the financial statements are
determined to belong to the different fair value level based on the lowest level of input values
that are significant to the fair value measurement as a whole: level 1 input is the unadjusted
92
quoted price for identical asset or liability available at the active market on the measurement
date; level 2 input is the directly or indirectly observable input for relevant asset or liability
apart from level 1 input; level 3 input is the unobservable input for relevant asset or liability.
(For levels 1 and 2) For financial instruments traded in an active market, the group determines
their fair value by their active market quotes; For financial instruments that are not traded in
an active market, the group uses valuation techniques to determine their fair value, and the
valuation model used is mainly the discounted cash flow model. The input of valuation
techniques mainly includes: risk-free interest rate of debt, credit premium and liquidity
premium; estimator coefficient. and liquidity discount of equity.
(For level 3) The fair value of level 3 is determined on the basis of the group's valuation
models, such as the discounted cash flow model. The group also considers the initial
transaction price, recent transactions of the same or similar financial instruments, or full
third-party transactions of comparable financial instruments. As at 31 December 2023, level 3
financial assets measured at fair value are valued by using significant unobserved inputs such
as discount rates, but their fair value is not materially sensitive to reasonable changes in these
significant unobserved inputs.
The group uses the market approach to determine the fair value of unlisted equity investments.
This requires the group to determine comparable listed companies, select market coefficient,
estimate liquidity discounts, etc., and is therefore subject to uncertainty.
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IV. Changes in Accounting Policies, Accounting Estimates
(1) Change in significant accounting policies
Changes on accounting policy and reasons Memo
Since January 1, 2023, the Company has implemented the provisions of the
Interpretation of Accounting Standards for Business Enterprises No. 16 promulgated
by the Ministry of Finance, "Accounting treatment of deferred income tax related to
assets and liabilities arising from single transactions is not applicable to the initial
recognition exemption". Individual transactions to which the provision applies that
occur between the beginning of the earliest period of presentation of the financial
statements in which the provision is first applied and the date of the first
implementation are adjusted according to the provision. Taxable temporary differences
and deductible temporary differences arise in respect of lease liabilities and use rights
assets recognized at the beginning of the earliest period of presentation of the financial
statements for which the provision is first applied, as well as in respect of anticipated
liabilities related to the disposal obligation recognized and corresponding related
assets, In accordance with this provision and the provisions of Accounting Standard for
Business Enterprises No. 18 - Income Tax, the cumulative impact is adjusted to the
opening retained earnings and other related financial statement items for the earliest
period in which the financial statements are presented.
(2) Affected items and amount
January 1, 2023
（Jan-Dec, 2022）
Affected items
Before Adjusted
After adjustment
adjustment amount
deferred tax liability 52,306,365.68 78,166.60 52,384,532.28
surplus reserve 825,226,634.15 -4,594.76 825,222,039.39
unappropriated profit 618,445,922.58 -65,810.05 618,380,112.53
minority interest 54,077,970.99 -7,761.79 54,070,209.20
income tax 1,054,609.62 -477,793.34 576,816.28
profit or loss of minority interest 1,633,633.87 1,154.31 1,634,788.18
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(3) Changes in significant accounting estimates
No.
V. Taxation
1. The main applicable tax and rate to the Company as follows:
Tax Tax base Tax rate
Value-added tax (VAT) Sales revenue or Purchase 5%、6%、9%、13%、
City construction tax Value-added tax payables 5%、7%
Education surcharge Value-added tax payables 3%
Local education surcharge Value-added tax payables 2%
Enterprise income tax (EIT) Current period taxable profit 15% or 25%
70% of cost of own property
Real estate tax or revenue from leasing 1.2% or 12%
property
Land use tax Land using right area Fixed amount per square meter
According to the relevant
Other tax
provisions of the state and local
Notes for tax entities with different EIT rate
Tax entities EIT rate
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd 15%
Dalian Bingshan Group Engineering Co., Ltd. 25%
Dalian Bingshan Group Sales Co., Ltd. 25%
Dalian Bingshan Air-conditioning Equipment Co., Ltd. 15%
Dalian Bingshan Guardian Automation Co., Ltd. 15%
Dalian Bingshan-RYOSETSU Quick Freezing Equipment Co., Ltd. 25%
Wuhan New World Refrigeration Industrial Co., Ltd. 15%
Dalian Bingshan Engineering & Trading Co., Ltd 25%
Dalian Universe Thermal Technology Co., Ltd. 15%
Chengdu Bingshan Refrigeration Engineering Co., Ltd. 25%
Wuhan New World Air-conditioning Refrigeration Engineering Co., Ltd 25%
Wuhan Lanning Energy Technology Co., Ltd 25%
Sonyo Compressor (Dalian)Co., Ltd. 15%
Sonyo Refrigeration System (Dalian) Co., Ltd. 15%
Sonyo Refrigeration (Dalian) Co., Ltd. 15%
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2. Tax preference
(1) The Company obtained the qualification of high and new technology enterprises in
December, 2023. The Certificate No. is GR202321201041. According to the tax bureau
approval, the Company can be granted for the preferential tax policy of enterprise income tax
rate of 15% from FY2023 to FY2025.
The Company’s subsidiary, Dalian Bingshan Air-conditioning Equipment Co., Ltd. obtained
the qualification of high and new technology enterprises in December, 2023. The Certificate
No. is GR202321201161. According to the tax bureau approval, the Company can be granted
for the preferential tax policy of enterprise income tax rate of 15% from FY2023 to FY2025.
The Company’s subsidiary, Dalian Bingshan Guardian Automation Co., Ltd. obtained the
qualification of high and new technology enterprises on 15th December, 2021. The Certificate
No. is GR202121200765. According to the tax bureau approval, the Company can be granted
for the preferential tax policy of enterprise income tax rate of 15% from FY2021 to FY2023.
The Company’s subsidiary, Wuhan New World Refrigeration Industrial Co., Ltd obtained the
qualification of high and new technology enterprises on 15th November, 2021. The Certificate
No. is GR202142001696. According to the tax bureau approval, the Company can be granted
for the preferential tax policy of enterprise income tax rate of 15% from FY2021 to FY2023.
The Company’s subsidiary, Dalian Universe Thermal Technology Co., Ltd. obtained the
qualification of high and new technology enterprises in December, 2023. The Certificate No. is
GR202321200114. According to the tax bureau approval, the Company can be granted for the
preferential tax policy of enterprise income tax rate of 15% from FY2023 to FY2025.
The Company’s subsidiary, Sonyo Compressor (Dalian)Co., Ltd. (hereinafter referred to as
“Sonyo Compressor” obtained the qualification of high and new technology enterprises in
October, 2021. The Certificate No. is GR202321201152. According to the tax bureau approval,
the Company can be granted for the preferential tax policy of enterprise income tax rate of
15% from FY2021 to FY2023.
The Company’s subsidiary, Sonyo Refrigeration System (Dalian) Co., Ltd. (hereinafter
referred to as “Sonyo Refrigeration System” obtained the qualification of high and new
technology enterprises in December, 2023. The Certificate No. is GR202321201152.
According to the tax bureau approval, the Company can be granted for the preferential tax
policy of enterprise income tax rate of 15% from FY2023 to FY2025.
The Company’s subsidiary, Sonyo Refrigeration (Dalian) Co., Ltd. (hereinafter referred to as
“Sonyo Refrigeration” obtained the qualification of high and new technology enterprises in
October, 2021. The Certificate No. is GR202121200368. According to the tax bureau approval,
the Company can be granted for the preferential tax policy of enterprise income tax rate of
15% from FY2021 to FY2023.
96
(2) According to the Announcement of the Ministry of Finance and Tax Administration on the
accelerate VAT Deduction for advanced manufacturing enterprise (Announcement No. 43,
2023), within the period from January 1st, 2023 to December 31st,2027, the advance enterprises
are allowed for input VAT deduction at 5% acceleration rate during the current period. The
Company and its subsidiaries, Dalian Bingshan Air-conditioning Equipment,
Dalian Bingshan Guardian Automation, Wuhan New World Refrigeration, Dalian Universe
Thermal, Sonyo Compressor, Sonyo Refrigeration and Sonyo Refrigeration System enjoy the
tax preference.
VI. Notes to Consolidated Financial Statements
The following disclosure date on this financial statement without special indication, “opening”
refers to January 1, 2023; “closing” refers to December 31, 2023; “current period” refers to the
period from January 1, 2023 to December 31, 2023; and “last period” refers to the period from
January 1, 2022 to December 31, 2022; with the currency unit RMB.
1. Monetary fund
Item Closing Balance Opening Balance
Cash on hand 70,750.93 80,702.47
Cash in bank 863,950,616.72 922,122,608.84
Other cash and cash equivalents 87,018,202.46 83,962,587.87
Total 951,039,570.11 1,006,165,899.18
Including: sum of deposits overseas - -
Note: within the bank deposits, $170,321,702.76 was time deposits and interest income;
Other monetary funds are bank acceptance deposit 44,200,486.65 Yuan, guarantee deposit
41,547,977.10 Yuan and migrant worker deposit 1,229,741.67 Yuan.
2. Notes receivable
(1) Category of notes receivable
Items Closing Balance Opening Balance
Bank acceptance notes 335,914,443.51 493,019,785.95
Trade acceptance notes 17,514,478.91 12,925,475.23
Total 353,428,922.42 505,945,261.18
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(2) Categories according to bad debts provision method
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debts
provision based on 354,313,722.61 100.00 884,800.19 0.25 353,428,922.42
group
Including: bank
335,914,443.51 94.81 - - 335,914,443.51
acceptance notes
Trade acceptance
18,399,279.10 5.19 884,800.19 4.81 17,514,478.91
notes
Total 354,313,722.61 100.00 884,800.19 0.25 353,428,922.42
(Continued)
Opening balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debts
provision based on 506,921,135.95 100.00 975,874.77 0.19 505,945,261.18
group
Including: bank
493,019,785.95 97.26 - - 493,019,785.95
acceptance notes
Trade acceptance
13,901,350.00 2.74 975,874.77 7.02 12,925,475.23
notes
Total 506,921,135.95 100.00 975,874.77 0.19 505,945,261.18
Categories based on group
Closing Balance
Items
Booking balance Provision Provision（%）
Bank acceptance notes 335,914,443.51 - -
Trade acceptance notes 18,399,279.10 884,800.19 4.81
Total 354,313,722.61 884,800.19 —
98
(3) Bad debt provision of notes receivable accrued, collected and reversed
Change during the year
Opening
Category Collected/ Closing Balance
balance Accrued Written-off
reversed
Bad debt
975,874.77 91,074.58 - 884,800.19
provision
Total 975,874.77 91,074.58 - 884,800.19
(4) Pledged notes receivable up to the end of year.
Items Closing pledged amount
Bank acceptance notes 4,939,655.20
Total 4,939,655.20
(5) Notes receivable endorsed or discounted but not mature at the end of year
Item Closing amount no more Closing amount still
recognized recognized
Bank acceptance notes - 151,261,975.36
Trade acceptance notes - 320,700.00
Total - 151,582,675.36
(6) Notes receivable written off: none
3. Accounts receivable
(1) Aging of accounts receivable
Account Age Closing Balance Opening Balance
Within 1 year（incl 1 year） 1,075,007,175.23 1,051,342,084.70
1-2 years 406,082,608.66 271,031,036.91
2-3 years 207,201,791.50 187,045,709.96
Over 3 years 453,345,639.16 392,478,408.13
Of which: 3-4years 140,135,046.24 69,585,549.01
4-5years 48,619,109.18 138,624,250.54
Over 5 years 264,591,483.74 184,268,608.58
Total 2,141,637,214.55 1,901,897,239.70
99
(2) Category of accounts receivable based on bad debt provision method
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
14,372,020.85 0.67 11,564,470.39 80.47 2,807,550.46
on individual basis
Bad debt provision
2,127,265,193.70 99.33 553,638,820.00 26.03 1,573,626,373.70
on group
Including: aging as
characteristics of 2,127,265,193.70 99.33 553,638,820.00 26.03 1,573,626,373.70
credit risk
Total 2,141,637,214.55 100.00 565,203,290.39 26.39 1,576,433,924.16
(Continued)
Opening balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
13,181,314.30 0.69 10,348,880.50 78.51 2,832,433.80
on individual basis
Bad debt provision
1,888,715,925.40 99.31 481,569,916.25 25.50 1,407,146,009.15
on group
Including: aging as
characteristics of 1,888,715,925.40 99.31 481,569,916.25 25.50 1,407,146,009.15
credit risk
Total 1,901,897,239.70 100.00 491,918,796.75 25.86 1,409,978,442.95
100
1) Bad debt provisions on individual basis
Opening balance Closing Balance
Name Accounts Provision for Accounts Provision for Proportion
Reason
receivable bad debts receivable bad debts (%)
Full
Company recovery
6,032,000.00 4,780,096.20 6,496,000.00 5,244,096.20 80.73
1 is not
expected
Other Recovery
company 7,149,314.30 5,568,784.30 7,876,020.85 6,320,374.19 80.25 is not
1 expected
Total 13,181,314.30 10,348,880.50 14,372,020.85 11,564,470.39 —
2) Bad debt provisions on group basis
Closing Balance
Aging Accounts Provision for Drawing proportion
receivable bad debts (%)
Within 1 year 1,075,007,175.23 61,229,181.77 5.70
1 to 2 years 403,753,793.79 67,078,438.64 16.61
2 to 3 years 201,613,496.72 61,315,691.42 30.41
3 to 4 years 139,220,135.04 68,416,921.28 49.14
4 to 5years 43,079,109.18 31,007,103.15 71.98
Over 5 years 264,591,483.74 264,591,483.74 100.00
Total 2,127,265,193.70 553,638,820.00 —
(4) Bad debt provision of current period
Change during the year
Opening Closing
Category Collected/
balance Accrued Written-off Others Balance
reversed
Bad debt
491,918,796.75 68,147,779.35 - 6,532,243.60 11,668,957.89 565,203,290.39
provision
Total 491,918,796.75 68,147,779.35 - 6,532,243.60 11,668,957.89 565,203,290.39
Note: others are from consolidation of Sonyo Refrigeration (Dalian) Co., Ltd.
101
(4) Accounts receivable written off in current period
Item Written off amount
Receivable actually written off 6,532,243.60
(5) Top 5 receivables and contract assets
The sum of top 5 of receivables and contract assets is 240,544,632.79Yuan, represents
9.92% of closing balance of receivables and contract assets and bad debt provision of
49,664,315.90Yuan shall be made.
4. Contract asset
(1) contract asset
Closing Balance
Items
Booking balance Provision Carrying amount
Undue warranty 265,440,261.85 37,369,046.20 228,071,215.65
Unsettled receivable of revenue
18,840,435.97 9,834,772.91 9,005,663.06
recognized over time
Total 284,280,697.82 47,203,819.11 237,076,878.71
(continued)
Opening balance
Items
Booking balance Provision Carrying amount
Undue warranty 210,149,278.14 31,927,565.84 178,221,712.30
Unsettled receivable of revenue
61,997,091.19 14,427,927.71 47,569,163.48
recognized over time
Total 272,146,369.33 46,355,493.55 225,790,875.78
(2) Significant change of the account
Items Amount Reason
Undue warranty 49,849,503.35 Change of consolidation scope
Unsettled receivable of revenue
-38,563,500.42 Settled during the year
recognized over time
Total 11,286,002.93 —
102
(3) Category of contract asset based on bad debt provision method
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
1,709,948.80 0.60 1,709,948.80 100.00 -
on individual basis
Bad debt provision
282,570,749.02 99.40 45,493,870.31 16.10 237,076,878.71
on group
Including: aging as
characteristics of 282,570,749.02 99.40 45,493,870.31 16.10 237,076,878.71
credit risk
Total 284,280,697.82 100.00 47,203,819.11 16.60 237,076,878.71
(continued)
Opening Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
2,722,948.80 1.00 2,722,948.80 100.00 -
on individual basis
Bad debt provision
269,423,420.53 99.00 43,632,544.75 16.19 225,790,875.78
on group
Including: aging as
characteristics of 269,423,420.53 99.00 43,632,544.75 16.19 225,790,875.78
credit risk
Total 272,146,369.33 100.00 46,355,493.55 17.03 225,790,875.78
1) Bad debt provisions on individual basis
Opening balance Closing Balance
Name Accounts Provision for Accounts Provision for Proportion
Reason
receivable bad debts receivable bad debts (%)
Other Recovery is not
2,722,948.80 2,722,948.80 1,709,948.80 1,709,948.80 100.00
companies2 expected
Total 2,722,948.80 2,722,948.80 1,709,948.80 1,709,948.80 — —
103
2) Bad debt provisions on group basis
Closing Balance
Aging Accounts Provision for Drawing proportion
receivable bad debts (%)
Within 1 year 153,250,756.63 9,890,583.27 6.45
1 to 2 years 71,084,892.44 10,935,114.90 15.38
2 to 3 years 21,276,574.60 5,611,742.31 26.38
3 to 4 years 27,683,262.15 11,105,880.37 40.12
4 to 5years 4,508,264.70 3,183,550.96 70.62
Over 5 years 4,766,998.50 4,766,998.50 100.00
Total 282,570,749.02 45,493,870.31 —
(3) Bad debt provision of current period
Collected/
Category Accrued Written-off Others Reason
reversed
Undue warranty - 3,755,144.26 - - -
Unsettled receivable of revenue
- 1,012,572.23 - - -
recognized over time
Total - 4,767,716.49 - - -
5. Finance receivable
(1) Category of finance receivable
Items Closing Balance Opening Balance
Bank acceptance notes 303,585,218.53 58,792,792.70
Total 303,585,218.53 58,792,792.70
(2) Category of accounts receivable based on bad debt provision method
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
303,585,218.53 100.00 - - 303,585,218.53
on group
Including: bank
303,585,218.53 100.00 - - 303,585,218.53
acceptance notes
Total 303,585,218.53 100.00 - - 303,585,218.53
(Continued)
104
Opening balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
58,792,792.70 100.00 - - 58,792,792.70
on group
Including: aging as
characteristics of 58,792,792.70 100.00 - - 58,792,792.70
credit risk
Total 58,792,792.70 100.00 - - 58,792,792.70
(3) Pledged notes receivable up to the end of year.
Items Closing pledged amount
Bank acceptance notes 99,078,000.87
Total 99,078,000.87
6. Other receivables
Items Closing Balance Opening Balance
Interest receivable - -
Dividend receivable 14,495.00 14,495.00
Other receivables 41,381,728.27 51,379,979.24
Total 41,396,223.27 51,394,474.24
6.1. Dividends receivable
(1) Classification
Company Closing Balance Opening Balance
Wuhan Steel and Electricity Co., Ltd. 14,495.00 14,495.00
Total 14,495.00 14,495.00
105
6.2. Other receivables
(1) The categories of other receivable according to nature
Items Closing Balance Opening Balance
Receivables and payables 33,092,423.14 38,051,147.58
Security deposit 30,103,093.46 37,147,665.19
Petty cash 3,669,152.52 5,099,052.90
Others 11,397,105.01 6,088,641.82
Total 78,261,774.13 86,386,507.49
(2) Aging of other receivable
Account Age Closing Balance Opening Balance
Within 1 year（incl 1 year） 23,517,039.35 27,654,438.76
1-2 years 8,134,653.15 17,231,991.92
2-3 years 9,354,562.84 26,252,562.64
Over 3 years 37,255,518.79 15,247,514.17
Of which: 3-4years 24,151,505.82 7,027,188.39
4-5years 6,300,480.70 2,501,537.52
Over 5 years 6,803,532.27 5,718,788.26
Total 78,261,774.13 86,386,507.49
(3) The bad debt provision of other receivables
1st stage 2nd stage 3rd stage
Expected credit
Bad debt Expected credit Expected credit loss
loss within the Total
provision loss within 12 within the whole period
whole period (no
months (impairment incurred)
impairment)
Opening
2,334,895.21 - 32,671,633.04 35,006,528.25
balance
Opening
balance during — — — —
the year
--transfer to the
- - - -
2nd stage
--transfer to the
-140,708.84 - 140,708.84 -
3rd stage
--reverse to the
- - - -
2nd stage
----reverse to - - - -
106
1st stage 2nd stage 3rd stage
Expected credit
Bad debt Expected credit Expected credit loss
loss within the Total
provision loss within 12 within the whole period
whole period (no
months (impairment incurred)
impairment)
the 1st stage
Accrued 161,905.22 - 1,724,045.76 1,885,950.98
Reverse - - - -
Cancelation - - - -
Written off 35,686.55 - - 35,686.55
Other
23,253.18 - - 23,253.18
movement
Closing
2,343,658.22 - 34,536,387.64 36,880,045.86
balance
Note: When one or more of the following situations occur, it is a "significant increase in
credit risk since the initial recognition" and is classified as the second stage: the account is older
than 1 year and the payment is overdue for more than 30 days but not more than 90 days; The
defaulting party has a negative event affecting its solvency; A significant adverse change in the
value of the collateral or in the quality of the security or credit enhancement provided by a third
party.
When one or more of the following occurs, it is considered as a "credit impairment has
occurred" and is classified as the third stage: the payment is overdue for more than 90 days; The
defaulting party experiences significant financial difficulties or is likely to go bankrupt or other
financial restructuring; Other situations that violate contractual agreements and indicate that
there is objective evidence of impairment of financial assets.
107
(4) Provision for bad debt
Change during the year
Opening Closing
Category Accrued Collected/
balance Written-off Others Balance
reversed
Bad debt
35,006,528.25 1,885,950.98 - 35,686.55 23,253.18 36,880,045.86
provision
Total 35,006,528.25 1,885,950.98 - 35,686.55 23,253.18 36,880,045.86
(5) Other receivables written off in current period: none.
Item Amount to be written off
Other receivables written off actually 35,686.55
(6) Other receivables from the top 5 debtors based on closing balance
% of Closing
Closing
Name Category Aging the total Balance of
Balance
OR Provision
Within 1
Top 1 Tax refund 7,718,652.20 9.86 282,502.67
year
Top 2 Deposit 2,548,847.50 3-5years 3.26 1,657,427.69
Top 3 AR/AP 2,476,894.20 2-3 years 3.16 756,691.18
4-5years
Top 4 Other deposit 1,150,000.00 1.47 90,260.00
Over 5 years
Top 5 Bid deposit 1,000,000.00 1-2years 1.28 36,600.00
Total — 14,894,393.90 — 19.03 2,823,481.54
7. Prepayments
(1) Aging of prepayments
Closing Balance Opening Balance
Items Amount Percentage Amount Percentage
(%) (%)
Within 1 year 133,068,644.50 86.75 143,894,431.33 83.66
1 to 2 years 12,010,696.67 7.83 18,707,868.78 10.88
2 to 3 years 2,578,747.06 1.68 4,457,439.74 2.59
Over 3 years 5,730,572.25 3.74 4,931,728.27 2.87
Total 153,388,660.48 100.00 171,991,468.12 100.00
(2) Prepayments from the top 5 debtors based on closing balance
The sum of top 5 of prepayment is 65,324,752.92 Yuan, represents 42.60% of closing
balance of prepayment.
108
8. Inventories
(1) Categories of inventories
Closing Balance
Item
Book value Provision for decline Net book value
Cost to fulfill the contract 657,703,661.17 15,425,401.03 642,278,260.14
Finished goods 524,399,789.91 47,832,216.91 476,567,573.00
Raw materials 282,868,685.78 31,011,520.30 251,857,165.48
Working in progress 211,744,888.60 10,130,805.54 201,614,083.06
Self-manufactured
35,347,357.53 - 35,347,357.53
semi-finished products
Materials on consignment
21,317,653.86 60,394.18 21,257,259.68
for further processing
Goods on transit 8,313,813.04 821,759.89 7,492,053.15
Properties written off debtors 2,708,646.00 1,149,186.00 1,559,460.00
Low-value consumable 166,267.10 - 166,267.10
Total 1,744,570,762.99 106,431,283.85 1,638,139,479.14
(Continued)
Opening Balance
Item
Book value Provision for decline Net book value
Cost to fulfill the contract 518,190,428.65 24,029,331.96 494,161,096.69
Finished goods 358,865,793.97 20,733,013.07 338,132,780.90
Raw materials 257,330,026.33 17,594,044.66 239,735,981.67
Working in progress 219,325,436.31 7,091,948.88 212,233,487.43
Goods on transit 64,331,292.17 463,920.35 63,867,371.82
Self-manufactured
semi-finished products 30,898,915.81 - 30,898,915.81
Materials on consignment
for further processing 15,134,850.12 540,289.54 14,594,560.58
Properties written off debtors 2,708,646.00 1,149,186.00 1,559,460.00
Low-value consumable 161,125.34 - 161,125.34
Total 1,466,946,514.70 71,601,734.46 1,395,344,780.24
109
(2) Provision for decline in the value of inventories
Increase Decrease
Opening Closing
Item Others Reverse/ Others
Balance Accrual Balance
transferred Written- off transferred
Raw
17,594,044.66 -2,603,790.07 22,790,431.86 6,769,166.15 - 31,011,520.30
materials
WIP 7,091,948.88 3,038,856.66 - - - 10,130,805.54
Finished
20,733,013.07 16,562,416.248 20,518,964.39 9,982,176.79 - 47,832,216.91
goods
Cost to fulfill
24,029,331.96 841,412.60 11,574,524.36 21,019,867.89 - 15,425,401.03
the contract
Materials on
consignment
540,289.54 -479,895.36 - - - 60,394.18
for further
processing
Goods on
463,920.35 287,037.52 70,802.02 - - 821,759.89
transit
Properties
written off 1,149,186.00 - - - - 1,149,186.00
debtors
Total 71,601,734.46 17,646,037.59 54,954,722.63 37,771,210.83 - 106,431,283.85
Accrual for provision for decline in the value of inventories
Basis for net realizable value Reasons for
Item
recognition reverse/write-off
Raw materials The amount deducting the expected Sold
WIP cost to product completion, selling Sold
Finished goods expense and relative tax from the Sold
Cost to fulfill the contract estimated selling price. Sold
9. Non-current asset due within one year
Item Closing Balance Opening Balance
Long term receivable due within 1 year - 15,715,631.52
Total - 15,715,631.52
10. Other current assets
Item Closing Balance Opening Balance
110
Input VAT to be deducted 18,112,002.39 12,825,675.49
Contract acquisition cost 4,532,291.00 -
Prepaid income tax presented at net amount
3,216,096.82 9,010,312.91
after offsetting
Prepaid VAT 198,895.83 11,646,669.59
Prepaid expenses 15,056.29 16,919.61
Total 26,074,342.33 33,499,577.60
11. Long term receivable
(1) Details
Closing Balance
Discounted
Item Carrying
Provision Book value rate
amount
Lease premium - - - -
---Unrealized financing income - - - -
Goods sold by installments - - - -
Total - - - -
(Continued)
Opening Balance
Discounted
Item Carrying
Provision Book value rate
amount
Lease premium - - - -
---Unrealized financing income - - - -
Goods sold by installments 5,591,380.90 428,922.00 5,162,458.90 4.75%
Total 5,591,380.90 428,922.00 5,162,458.90 —
111
(2) Category of long-term receivable based on bad debt provision method
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
- - - - -
on group
Including: bank
- - - - -
acceptance notes
Total - - - - -
(Continued)
Opening balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
5,591,380.90 100.00 428,922.00 7.67 5,162,458.90
on group
Including: aging as
characteristics of 5,591,380.90 100.00 428,922.00 7.67 5,162,458.90
credit risk
Total 5,591,380.90 100.00 428,922.00 7.67 5,162,458.90
112
1) The bad debt provision under expected credit loss model
1st stage 2nd stage 3rd stage
Bad debt Expected credit Expected credit loss Expected credit loss
Total
provision loss within 12 within the whole period within the whole period
months (no impairment) (impairment incurred)
Opening
428,922.00 - - 428,922.00
balance
Opening
balance during — — — —
the year
--transfer to the
- - - -
2nd stage
--transfer to the
- - - -
3rd stage
--reverse to the
- - - -
2nd stage
----reverse to
- - - -
the 1st stage
Accrued - - - -
Reverse 210,600.00 - - 210,600.00
Cancelation - - - -
Written off - - - -
Other
-218,322.00 - - -218,322.00
movement
Closing balance - - - -
(3) Bad debt provision of long-term receivable for the year
Change during the year
Opening Closing
Category Accrued Collected/
balance Written-off Others Balance
reversed
Bad debt
428,922.00 - 210,600.00 - -218,322.00 -
provision
Total 428,922.00 - 210,600.00 - -218,322.00 -
113
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements
January 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
12.Long-term equity investments
Increase/Decrease
Gains and Provision
Beginning losses Adjustment of Cash bonus for Provision for
Investee recognized other Change of or profits impairment Ending balance
balance Increased Decreased Others impairment
under the comprehensive other equity announced to of the
equity income issue current
method period
Associates — — — — — — — — — — —
Dalian Honjo
Chemical Co., Ltd
9,819,096.80 - - -594,472.68 - - -1,050,000.00 - 1,717,629.40 9,892,253.52 -
Keihin-Grand Ocean
Thermal Technology 60,089,313.51 - - -509,338.51 - - -2,000,000.00 - - 57,579,975.00 -
(Dalian)Co.,Ltd.
Dalian Fuji
Bingshan Vending 111,101,339.93 - - -43,490,921.84 - - - - - 67,610,418.09 -
Machine Co., Ltd.
MHI Bingshan
Refrigeration 15,401,109.10 - - 1,142,546.44 - - - - - 16,543,655.54 -
(Dalian) Co.,Ltd.
Dalian Fuji
Bingshan Vending
Machine Sales Co.,
- - - - - - - - - - -
Ltd
Jiangsu Jingxue
Insulation
Technology Co.,Ltd
140,124,248.76 - - 5,840,827.15 - - -1,610,172.00 - - 144,354,903.91 -
(N4)
Dalian Bingshan
Metal Technology 175,313,807.46 - - 31,071,464.97 - - -33,134,422.30 - - 173,250,850.13 -
Co.,Ltd.
114
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements
January 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Increase/Decrease
Gains and Provision
Beginning losses Adjustment of Cash bonus for Provision for
Investee recognized other Change of or profits impairment Ending balance
balance Increased Decreased Others impairment
under the comprehensive other equity announced to of the
equity income issue current
method period
Dalian Bingshan
Group Huahuida
Financial Leasing
45,603,876.95 - - 1,197,707.15 - - -751,127.55 - - 46,050,456.55 -
Co., Ltd
Wuhan Sikafu
Power Control 5,534,979.43 - - 457,455.33 - - - - - 5,992,434.76 -
Equipment Co., Ltd
Total 562,987,771.94 - - -4,884,731.99 - - -38,545,721.85 - 1,717,629.40 521,274,947.50 -
115
13.Other non-current financial assets
Item Closing Balance Opening Balance
Financial assets classified as FVTPL 164,024,771.63 149,950,861.31
Including: equity instruments 164,024,771.63 149,950,861.31
Total 164,024,771.63 149,950,861.31
14. Investment property
(1) Investment property measured as cost model
Property&
Item Land-use-rights Total
building
I. Initial cost — — —
1. opening balance 230,594,490.07 26,094,438.38 256,688,928.45
2. addition 15,579,127.78 - 15,579,127.78
(1) FA\transferred from CIP 15,579,127.78 - 15,579,127.78
3. decrease - - -
4. closing balance 246,173,617.85 26,094,438.38 272,268,056.23
II. Accumulated depreciation — — —
1. opening balance 128,527,417.44 12,828,592.81 141,356,010.25
2. addition 6,800,475.72 521,888.76 7,322,364.48
(1) accrued/amortization 5,300,697.15 521,888.76 5,822,585.91
(2) FA\transferred from CIP 1,499,778.57 - 1,499,778.57
3. decrease - - -
4. closing balance 135,327,893.16 13,350,481.57 148,678,374.73
III. Impairment reserve — — —
1. opening balance - - -
2. addition - - -
3. decrease - - -
4. closing balance - - -
IV. Book value — — —
1. Closing book value 110,845,724.69 12,743,956.81 123,589,681.50
2. Opening book value 102,067,072.63 13,265,845.57 115,332,918.20
(2) Investment property without ownership certificate
Item Book value Reason
116
Because the land use right and the plant’s ownership
belong to different person, the deed of the plant was
Plant 12,141,047.62 not obtained. In 2023, the land use right is obtained,
the certificate of the plant ownership is in progress
The documents are not ready in full, the certificate of
Rihang Apartment 1,958,830.20 the building ownership can not be dealt with
15. Fixed assets
Items Closing Book Value Opening Book Value
Fixed asset 1,291,851,402.46 1,229,029,368.93
Fixed asset disposal - -
Total 1,291,851,402.46 1,229,029,368.93
(1) Fixed assets detail
Property& Machinery Transportation Other
Item equipment Total
buildings equipment equipment
I. Initial cost — — — — —
1.Opening
833,131,692.61 1,700,788,050.58 21,850,467.55 215,907,705.08 2,771,677,915.82
balance
2. Increase 169,961,408.00 206,761,056.32 6,124,546.45 43,911,382.93 426,758,393.70
(1) Purchase 13,060,683.47 3,476,651.96 363,268.65 4,559,341.33 21,459,945.41
(2) Transferred
from
2,439,313.50 49,253,798.47 413,539.84 16,259,558.57 68,366,210.38
construction-in-pr
ogress
(3) Acquired from
business 154,461,411.03 134,755,852.34 5,347,737.96 23,092,483.03 317,657,484.36
combination
(4) financial lease - 19,274,753.55 - - 19,274,753.55
3. Decrease 18,330,807.67 46,685,982.39 1,560,741.04 11,370,982.59 77,948,513.69
(1) Disposal 2,999,204.64 46,685,982.39 1,560,741.04 11,370,982.59 62,616,910.66
(2) transferred int
investment 15,331,603.03 - - - 15,331,603.03
property
4.Closing balance 984,762,292.94 1,860,863,124.51 26,414,272.96 248,448,105.42 3,120,487,795.83
II. Accumulated
— — — — —
depreciation
1.Opening
244,228,011.91 1,120,019,881.71 15,419,223.76 149,998,682.42 1,529,665,799.80
balance
117
Property& Machinery Transportation Other
Item equipment Total
buildings equipment equipment
2. Increase 101,507,446.57 198,882,895.04 4,931,531.13 30,334,072.95 335,655,945.69
(1) Accrued 24,470,757.08 91,543,120.54 1,570,559.26 12,218,112.81 129,802,549.69
(2) Acquired
from
77,036,689.49 101,969,284.95 3,360,971.87 18,115,960.14 200,482,906.45
business
combination
(3) financial lease - 5,370,489.55 - - 5,370,489.55
3. Decrease 2,686,973.65 37,637,882.98 1,423,918.35 10,341,217.21 52,089,992.19
(1) Disposal 1,187,195.08 37,637,882.98 1,423,918.35 10,341,217.21 50,590,213.62
(2) transferred int
investment 1,499,778.57 - - - 1,499,778.57
property
4.Closing balance 343,048,484.83 1,281,264,893.77 18,926,836.54 169,991,538.16 1,813,231,753.30
III. Impairment
— — — — —
reserve
1.Opening
201,250.96 8,839,885.62 286,519.26 3,655,091.25 12,982,747.09
balance
2. Increase 1,960,721.36 3,258,013.57 - 414,884.85 5,633,619.78
(1)Acquired from
business 1,960,721.36 3,258,013.57 414,884.85 5,633,619.78
combination
3. Decrease 1,036,065.45 2,088,217.14 - 87,444.21 3,211,726.80
(1) Disposal 1,036,065.45 2,088,217.14 - 87,444.21 3,211,726.80
4.Closing balance 1,125,906.87 10,009,682.05 286,519.26 3,982,531.89 15,404,640.07
IV.Book value — — — — —
1.Closing book
640,587,901.24 569,588,548.69 7,200,917.16 74,474,035.37 1,291,851,402.46
value
2.Opening book
588,702,429.74 571,928,283.25 6,144,724.53 62,253,931.41 1,229,029,368.93
value
(2) Fixed assets without ownership certificate
Item Book value Reason
118
Up to December 31,2023, sum of net book value
of the buildings without ownership certificate is
30,753,216.16 Yuan, they are all
self-constructed buildings, which is the property
Self -constructed buildings 30,753,216.16
of Sonyo Compressor (Dalian)Co., Ltd.
Because the land right where the buildings stand
on are not obtained, ownership certificate of the
buildings are not ready.
16. Construction-in-progress
Item Closing book value Opening book value
Construction-in-progress 114,801,351.21 115,577,902.54
Construction materials - -
Total 114,801,351.21 115,577,902.54
(1) Construction-in-progress details
Closing balance Opening balance
Item
Book balance Provision Book Value Book balance Provision Book value
Buildings &
reconstruction 26,282,803.78 - 26,282,803.78 24,796,146.56 - 24,796,146.56
Improvement of
machinery 83,833,793.88 - 83,833,793.88 82,341,565.62 - 82,341,565.62
Software of
intelligent 4,684,753.55 - 4,684,753.55 3,575,525.17 - 3,575,525.17
manufacture
Power generation
- - - 9,164,665.19 4,300,000.00 4,864,665.19
project
Total 114,801,351.21 - 114,801,351.21 119,877,902.54 4,300,000.00 115,577,902.54
119
(2) Change in the significant construction in progress
Decrease
Opening Transfer to Closing
Name Increase Other
balance FA/ Intangible balance
decrease
assets
Buildings &
reconstruction 24,796,146.56 2,512,958.85 3,040,744.66 247,524.75 24,020,836.00
Improvement of
machinery 82,341,565.62 36,587,416.93 58,254,020.37 1,026,548.66 59,648,413.52
Software of
intelligent 3,575,525.17 1,230,929.72 - 4,806,454.89 -
manufacture
Power generation
project 9,164,665.19 - 4,864,665.19 4,300,000.00 -
Total 119,877,902.54 40,331,305.50 66,159,430.22 10,380,528.30 83,669,249.52
(Continued)
Percent of Including:
investment Progress Accumulated accumulate Interest
Source of
Name Budget against of capitalized d capitalized capitalization
funds
budget construction interest interest of Rate (%)
(%) the year
Buildings & Self-
29,847,212.07 80.48 80.48 - - -
reconstruction financing
Improvement Self-
62,164,977.27 95.95 95.95 - - -
of machinery financing
Software of
intelligent 3,610,000.00 - - - - - —
manufacture
Power
generation 9,164,665.19 - - - - - —
project
Total 104,786,854.53 — — — — — —
(3) Impairment provision
Opening Closing
Item Increase Decrease Reason
balance balance
Power
generation 4,300,000.00 - 4,300,000.00 - —
project
Total 4,300,000.00 - 4,300,000.00 - —
120
17. Right-of-use assets
Property/ Transportation Electronic
Item Machinery Land use right Total
buildings equipment equipment
I. Initial cost — — — — — —
1.Opening balance 12,258,253.25 22,042,380.89 334,540.86 194,322.58 7,945,762.91 42,775,260.49
2. Increase 17,260,086.14 - - 802,669.35 7,579,035.02 25,641,790.51
(1) lease in 17,260,086.14 - - 802,669.35 - 18,062,755.49
(2) business combination - - - - 7,579,035.02 7,579,035.02
3. Decrease 7,217,240.70 20,541,973.76 334,540.86 - 121,248.96 28,215,004.28
(1) Disposal 7,217,240.70 1,267,220.21 334,540.86 - 121,248.96 8,940,250.73
(2) transferred into FA - 19,274,753.55 - - - 19,274,753.55
4.Closing balance 22,301,098.69 1,500,407.13 - 996,991.93 15,403,548.97 40,202,046.72
II. Accumulated
— — — — — —
amortization
1.Opening balance 2,561,983.47 7,244,798.14 223,027.24 99,228.48 1,704,560.90 11,833,598.23
2. Increase 8,604,790.32 1,263,779.95 111,513.60 62,992.06 2,139,878.33 12,182,954.26
(1) Accrued 8,604,790.32 1,263,779.95 111,513.60 62,992.06 1,297,763.28 11,340,839.21
(2) business combination - - - - 842,115.05 842,115.05
3. Decrease 6,076,357.87 7,870,831.42 334,540.84 - 80,832.72 14,362,562.85
(1) Disposal 6,076,357.87 1,188,837.41 334,540.84 - 80,832.72 7,680,568.84
(2) transferred into FA - 6,681,994.01 - - - 6,681,994.01
4.Closing balance 5,090,415.92 637,746.67 - 162,220.54 3,763,606.51 9,653,989.64
121
Property/ Transportation Electronic
Item Machinery Land use right Total
buildings equipment equipment
III. Impairment reserve — — — — — —
1. Opening balance - - - - - -
2. Increase - - - - - -
3. Decrease - - - - - -
4.Closing balance - - - - - -
IV. Book value — — — — — —
1. Closing book value 17,210,682.77 862,660.46 - 834,771.39 11,639,942.46 30,548,057.08
2. Opening book value 9,696,269.78 14,797,582.75 111,513.62 95,094.10 6,241,202.01 30,941,662.26
122
18. Intangible assets
Non-
Item Land use right Patent Others Total
Patent
I. Initial cost — — — — —
1.Opening balance 173,151,420.72 17,630,188.82 5,773,680.00 59,376,795.82 255,932,085.36
2. Increase 67,754,316.68 - - 17,330,846.32 85,085,163.00
(1) Purchase 15,106,584.15 - - 4,347,395.91 19,453,980.06
(2) Transferred from
- - - 278,761.06 278,761.06
construction-in-progress
(3) increase via merge 52,647,732.53 - - 12,704,689.35 65,352,421.88
3. Decrease - - - 2,458,296.66 2,458,296.66
(1) Disposal - - - 2,458,296.66 2,458,296.66
4.Closing balance 240,905,737.40 17,630,188.82 5,773,680.00 74,249,345.48 338,558,951.70
II. Accumulated
— — — — —
amortization
1.Opening balance 47,596,987.88 9,040,676.05 4,273,700.00 26,944,001.36 87,855,365.29
2. Increase 24,304,389.58 1,429,512.20 500,008.00 15,889,731.72 42,123,641.50
(1) Accrued 6,448,992.14 1,429,512.20 500,008.00 5,192,180.77 13,570,693.11
(2) Increase from merger 17,855,397.44 - - 10,697,550.95 28,552,948.39
3. Decrease - - - 1,986,197.48 1,986,197.48
(1) Disposal - - - 1,986,197.48 1,986,197.48
4.Closing balance 71,901,377.46 10,470,188.25 4,773,708.00 40,847,535.60 127,992,809.31
III. Impairment
— — — — —
provision
1. Opening balance - - - - -
2. Increase - - - 50,980.35 50,980.35
(1) Increase from merger - - - 50,980.35 50,980.35
3. Decrease - - - 38,999.18 38,999.18
(1) Disposal - - - 38,999.18 38,999.18
4.Closing balance - - - 11,981.17 11,981.17
IV. Book value — — — — —
1. Closing book value 169,004,359.94 7,160,000.57 999,972.00 33,389,828.71 210,554,161.22
2. Opening book value 125,554,432.84 8,589,512.77 1,499,980.00 32,432,794.46 168,076,720.07
19. Goodwill
(1) Original cost of goodwill
123
Increased during Decreased during
current year current year
Opening
Name Enterprises Closing Balance
Balance
merger Other Disposal Other
increase
Sonyo Compressor
(Dalian)Co., Ltd 240,922,872.80 - - - - 240,922,872.80
Sonyo Refrigeration
(Dalian) Co., Ltd.(N1) - 38,056,663.52 - - - 38,056,663.52
Sonyo Refrigeration
System (Dalian) Co., 5,671,836.12 - - - - 5,671,836.12
Ltd.
Dalian Universe
Thermal Technology 1,440,347.92 - - - - 1,440,347.92
Co., Ltd.
Dalian Bingshan
Group Engineering 310,451.57 - - - - 310,451.57
Co., Ltd
Total 248,345,508.41 38,056,663.52 - - - 286,402,171.93
(2) Goodwill impairment provision
In the year 2015, the book value of equity investment of Dalian Universe Thermal Technology
Co., Ltd exceeds the fair value of the proportion of the acquired company’s identifiable net asset.
The difference between the book value of equity investment of 48, 287,589.78 Yuan and the
identifiable net asset’s fair value of Dalian Sanyo High-efficient Refrigeration System Co., Ltd of
46,847,241.86 Yuan on the acquisition date of July 31st ,2015 is recognized as goodwill of
1,440,347.92 Yuan on The Company consolidated financial report at the end of the year.
In the year 2016, Dalian Bingshan Group Engineering Co., Ltd purchases shares of Dalian
Bingshan Baoan Leisure Industry Co., Ltd and gains control. The transferred price is based on the
net asset of Dalian BingshanBaoan Leisure Industry Co., Ltd on June 30th, 2016. Negotiated with
Dalian Bingshan Baoan Leisure Industry Co., Ltd’s shareholder Baoan Water Project (China)
Limited Company, the transfer price is the combination cost on the purchasing date which is
5,359,548.42 Yuan, the fair value of proportion of Dalian BingshanBaoan Leisure Industry
Company’s identifiable net asset is 5,049,096.85 Yuan on the purchasing day, therefore, goodwill is
310,451.57Yuan on the purchasing date. Dalian Bingshan Group Engineering Co., Ltd absorbed
Dalian Bingshan Baoan Leisure Industry Co., Ltd in 2019.
In 2022, the Company purchased 60% of the shareholdings of Sonyo Compressor (Dalian)Co.,
Ltd from Sanyo Electric (China)Co., Ltd, and negotiated with Sanyo Electric (China)Co., Ltd to
determine the share transfer consideration of 929,148,000.00 Yuan. After the transaction, Sonyo
Compressor (Dalian)Co., Ltd became a subsidiary. This transaction is a business combination not
under same control, cost of combination is the FV of previous shareholdings on acquisition date plus
60% shareholdings acquisition consideration, which is 1,548,580,000Yuan in total. Goodwill of
240,922,872.80 Yuan is recognized for the difference between the share of FV of net identifiable
asset of acquiree, 1,307,657,127.20Yuan and cost of combination on acquisition date.
124
In 2022, the Company purchased 30% of the shareholdings of Sonyo Refrigeration System
(Dalian) Co., Ltd. from Panasonic Corporation of china Co., LTD and 25% shareholdings of Sonyo
Refrigeration System (Dalian) Co., Ltd from Panasonic Appliances cold Chain (Dalian)Co.Ltd. The
negotiated share transfer consideration of 81,735,060.00 Yuan. After the transaction, Sonyo
Compressor (Dalian)Co., Ltd became a subsidiary. This transaction is a business combination not
under same control, cost of combination is the FV of previous shareholdings on acquisition date plus
55% shareholdings acquisition consideration, which is 111,456,900.00Yuan in total. Goodwill of
5,671,836.12 Yuan is recognized for the difference between the share of FV of net identifiable asset
of acquire, 105,785,063.87Yuan and cost of combination on acquisition date.
In 2023, the Company purchased 40% of the shareholdings of Sonyo Refrigeration (Dalian) Co.,
Ltd. from Panasonic Corporation of China Co., LTD and 60% shareholdings of Sonyo Refrigeration
(Dalian) Co., Ltd from Sanyo Electric (China)Co., Ltd. This transaction is a business combination
not under same control, cost of combination is the consideration of 145,285,500.00 Yuan for share
transfer. Goodwill of 38,056,663.52Yuan is recognized for the difference between the share of FV of
net identifiable asset of acquire. 107,228,836.48Yuan and cost of combination on acquisition date.
The book value of goodwill from business combination shall be allocated into the relevant asset
group using the reasonable method since acquisition date, and be tested for impairment on related
asset groups containing goodwill by professional appraisal companies or use evaluation models to
predict the recoverable amount of related asset groups containing goodwill in accordance with the
present value of future cash flows including gross profit rate, sales growth rate (1%-8%), discount
rate(10.74%-11.62%) and other parameters in the next 5 years. No goodwill impairment has been
found when the recoverable amount of asset group for testing is higher than its book value.
125
20. Long-term unamortized expense
Opening Other Closing
Item Increase Amortization
Balance Decrease balance
Greenland of new factory 3,940,176.58 - 892,115.52 - 3,048,061.06
Employee’s dormitory use
1,596,735.42 - 138,478.32 - 1,458,257.10
right
Membership fee for golf 390,500.00 - 16,500.00 - 374,000.00
Renovation and rebuilding 339,641.30 - 197,549.97 - 142,091.33
Amortization of instruments 219,513.62 389,380.61 293,657.62 - 315,236.61
Technology entrance fee of
- 16,016.35 7,340.85 - 8,675.50
cold and heat machinery
Total 6,486,566.92 405,396.96 1,545,642.28 - 5,346,321.60
21. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets without offsetting
Closing balance Opening balance
Item Deductible Deferred tax Deductible
Deferred tax assets
temporary difference assets temporary difference
Provision for
credit impairment 445,951,688.75 81,048,834.24 383,685,092.04 70,892,192.53
Provision for
impairment of 153,519,850.70 23,185,410.37 110,205,587.05 18,013,430.31
assets
Lease liability 52,799,814.74 8,006,670.79 18,901,886.18 2,883,573.82
FA depreciation 48,341,817.47 7,251,272.60 35,600,567.62 5,340,085.14
Accrued sales
discount 17,125,319.07 2,568,797.86 13,744,913.65 2,061,737.05
Unrealized profit
from internal 13,034,503.47 1,955,175.52 13,034,503.47 1,955,175.52
transaction
Unrealized
revenue 11,170,890.18 2,792,722.55 - -
Provision 4,544,802.83 714,830.47 16,786,967.43 2,518,045.11
Safety cost 449,375.00 67,406.25 - -
Deductible loss - - 9,991,507.80 1,498,726.17
Others 1,138,175.07 170,726.26 845,210.65 126,781.60
Total 748,076,237.28 127,761,846.91 602,796,235.89 105,289,747.25
126
(2) Deferred tax liabilities without offsetting
Closing balance Opening balance
Item Taxable Taxable
Deferred tax Deferred tax
temporary temporary
liabilities liabilities
difference difference
Revaluation increase in
business combination
asst not under same 253,978,835.91 38,096,825.39 211,352,103.77 31,702,815.57
control
Change on FV of other
non-current financial 151,430,911.13 22,714,636.67 137,357,000.73 20,603,550.11
assets
FA depreciation 44,655,750.06 6,698,362.51 46,545,245.48 6,981,786.82
Use right of asset 48,864,566.94 7,414,624.88 19,380,755.68 2,961,740.42
Total 498,930,064.04 74,924,449.45 414,635,105.66 62,249,892.92
(3) Net deferred tax asset or liability
Offset
Offset amount at Closing balance of amount at the Opening balance of
Item
the year-end net of DTA/DTL beginning of net of DTA/DTL
the year
Deferred tax
14,112,987.38 113,648,859.53 9,865,360.64 95,424,386.61
assets
Deferred tax
14,112,987.38 60,811,462.07 9,865,360.64 52,384,532.28
liabilities
(4) Unrecognized deferred tax assets details
Item Closing balance Opening balance
Deductible temporary difference 227,656,543.59 173,990,137.06
Deductible loss 553,968,553.34 310,513,803.17
Total 781,625,096.93 484,503,940.23
127
(5) Unrecognized deductible loss of deferred tax assets expired years
Year Closing balance Opening balance Notes
2024 7,735,166.14 7,735,166.14 —
2025 8,950,922.50 8,950,922.50 —
2026 54,629,003.37 54,629,003.37 —
2027 67,364,986.52 67,240,033.97 —
2028 55,969,301.70 13,111,421.07 —
2029 39,791,411.14 45,365,135.77 —
2030 7,689,545.97 10,574,799.57 —
2031 126,221,649.87 50,864,213.30 —
2032 44,819,905.64 52,043,107.48 —
2033 140,796,660.49 - —
Total 553,968,553.34 310,513,803.17 —
22. Other non-current asset
Closing Balance Opening balance
Category Carrying Book Carrying
Book value Provision Provision
amount value amount
Debt
offset 21,770,721.00 1,527,371.56 20,243,349.44 - - -
housing
Total 21,770,721.00 1,527,371.56 20,243,349.44 - - -
23. Assets with restricted ownership or use rights
Item At the year end
Book value Carrying amount Type Restriction
Guarantee
Monetary fund 110,277,531.37 110,277,531.37 Frozen deposit/ frozen
bank account
Notes receivable 4,939,655.20 4,939,655.20 Pledged Pledged
Financing of receivable 99,078,000.87 99,078,000.87 Pledged Pledged
FA 89,720,897.99 60,540,912.88 Pledged Pledged
Intangible asset 8,266,573.44 5,421,865.27 Pledged Pledged
Investment property 38,955,728.90 32,097,825.31 Pledged Pledged
Total 351,238,387.77 312,355,790.90 — —
(continued)
128
Item At the beginning of the year
Book value Carrying amount Type Restriction
Guarantee
Monetary fund 84,504,096.01 84,504,096.01 Frozen deposit/ frozen
bank account
Notes receivable 98,917,384.72 98,917,384.72 Pledged Pledged
Financing of receivable 15,259,393.79 15,259,393.79 Pledged Pledged
FA 89,669,668.86 62,207,555.51 Pledged Pledged
Intangible asset 8,266,573.44 5,587,198.75 Pledged Pledged
Investment property 38,955,728.90 32,981,247.79 Pledged Pledged
Total 335,572,845.72 299,456,876.57 — —
Note: DALIAN BRANKA TECHNOLOGY CO., LTD prosecuted our company, therefore
4,317,629.58Yuan is frozen. But subsequently the adjudication is made. Xuchang Superlift
Energy Saving Technology Co., LTD prosecuted Dalian Bingshan Group Engineering Co., Ltd,
therefore 14,435,825.75 Yuan is frozen. But subsequently both parties reach an accommodation,
the frozen is over. Xining Changfeng Group Trade Co. Ltd prosecuted Dalian Bingshan Group
Engineering Co., Ltd, therefore 2,168,000.00 Yuan is frozen. Dalian Bingshan Guardian
Automation Co., Ltd.’s account is frozen with 439,215.89 Yuan, and Sonyo Refrigeration
(Dalian) Co., Ltd.’s account is frozen with215,000.00 Yuan because of litigation.
The Company’s subsidiary, Dalian Universe Thermal Technology Co., Ltd pledged the
bank acceptance note to the bank as guarantee for issuing the bank acceptance note.
The Company’s subsidiary, Dalian Bingshan Engineering & Trading Co., Ltd pledged the
bank acceptance note to the bank as guarantee for issuing the bank acceptance note.
The Company’s subsidiary, Sonyo Compressor (Dalian)Co., Ltd pledged the bank
acceptance note to the bank as guarantee for issuing the bank acceptance note.
The Company’s subsidiary, Sonyo Refrigeration (Dalian) Co., Ltd pledged the bank
acceptance note to the bank as guarantee for issuing the bank acceptance note.
The Company’s subsidiary, Wuhan New World Refrigeration Industry Co., LTD.,
mortgaged its fixed assets, intangible assets and the investment property to the bank, as an
integrated limit of credit used for acceptance, letter of credit, letter of guarantee, factoring, other
specific credit business.
129
24. Short-term borrowing
(1) Category of short-term borrowing
Loan category Closing balance Opening balance
Credit loan 256,686,746.70 262,016,713.87
Factoring loan 2,976,345.47 -
Pledged loan 2,624,692.21 12,036,276.28
Total 262,287,784.38 274,052,990.15
25. Notes payable
Notes Category Closing balance Opening balance
Bank acceptance notes 670,720,999.48 616,424,384.85
Commercial acceptance notes - 2,520,000.00
Total 670,720,999.48 618,944,384.85
26. Accounts payable
Item Closing balance Opening balance
Material payments 931,983,444.51 956,122,327.00
Project payments 675,076,736.92 567,873,401.74
Equipment payments 43,234,911.60 55,406,593.91
Others 5,540,269.98 6,695,737.94
Total 1,655,835,363.01 1,586,098,060.59
27. Other accounts payable
Item Closing balance Opening balance
Interest payable - -
Dividend payable 533,156.00 533,156.00
Other accounts payable 278,270,996.17 66,521,094.25
Total 278,804,152.17 67,054,250.25
27.1 Dividend payable
Item Closing balance Opening balance
Ordinary share dividend 533,156.00 533,156.00
Total 533,156.00 533,156.00
130
27.2 Other accounts payable
(1) Other payables categorized by payments nature
Payments nature Closing balance Opening balance
Supplier platform 179,737,197.47 -
Apply for reimbursement and
unpaid 24,617,613.80 21,409,586.91
Payable factoring 22,407,941.90 -
Cash pledge and security deposit 14,448,796.02 11,393,395.62
Agency fees 5,317,884.69 -
Repair 4,676,404.47 -
Trade mark and royalty 2,531,401.13 3,505,028.04
Receipts under custody 830,631.83 700,531.82
Others 23,703,124.86 29,512,551.86
Total 278,270,996.17 66,521,094.25
28. Contract liability
(1) Contract liability
Item Closing balance Opening balance
Received in advance due from unrealized revenue 787,685,294.53 647,645,820.57
Total 787,685,294.53 647,645,820.57
(2) Contract liability over 1 year
Item Closing balance Unsettled reason
Company 2 23,690,469.49 Not complete yet
Total 23,690,469.49 —
(3) Change of book value of the contract liability
Item Change amount Change reason
Combination
Received in advance due from unrealized revenue 146,750,000.38
Scope change
Total 146,750,000.38 —
131
29. Employee’s payable
(1) Category of employee’s payable
Opening
Item Increase Decrease Closing balance
balance
Short-term employee’s
118,200,459.60 698,112,149.00 666,960,098.49 149,352,510.11
payable
Post-employment benefit
–defined contribution 16,223.63 67,338,512.94 67,343,533.22 11,203.35
plan
Termination benefits - 2,643,680.07 2,510,280.07 133,400.00
Other welfare due within
1 year - - - -
Total 118,216,683.23 768,094,342.01 736,813,911.78 149,497,113.46
(2) Short-term employee’s payables
Opening
Item Increase Decrease Closing balance
balance
Salaries, bonus,
103,351,245.84 566,724,928.58 533,844,717.12 136,231,457.30
allowance, and subsidy
Welfare - 29,570,037.23 29,570,037.23 -
Social insurance 9,001.71 40,370,113.39 40,372,189.41 6,925.69
Include: Medical
7,733.56 32,334,416.06 32,335,495.51 6,654.11
insurance
Supplemental
- 37,988.21 37,988.21 -
insurance
On-duty injury
1,268.15 4,158,076.12 4,159,072.69 271.58
insurance
Maternity insurance - 3,839,633.00 3,839,633.00 -
Housing funds - 46,650,075.94 46,471,919.96 178,155.98
Labor union and training
3,426,187.27 11,176,647.07 10,594,153.94 4,008,680.40
expenses
Short-term leave with pay - - - -
Reward bonus and welfare
11,414,024.78 3,620,346.79 6,107,080.83 8,927,290.74
fund
Total 118,200,459.60 698,112,149.00 666,960,098.49 149,352,510.11
(3) Defined contribution plan
132
Opening
Item Increase Decrease Closing balance
balance
Pension 12,626.24 65,219,039.12 65,220,801.52 10,863.84
Unemployment
3,597.39 2,119,473.82 2,122,731.70 339.51
insurance
Company annuity plan - - - -
Total 16,223.63 67,338,512.94 67,343,533.22 11,203.35
30. Tax payable
Item Closing balance Opening balance
Enterprise income tax 10,958,503.00 3,541,171.62
Value-added tax 5,013,411.92 23,058,922.64
Real estate tax 2,589,711.66 2,212,510.37
Land use tax 1,313,078.49 1,122,457.62
Stamp duty 879,269.28 787,688.77
City maintenance and construction tax 551,839.60 1,253,818.83
Individual income tax 514,426.82 818,322.16
Education surcharge 394,171.13 895,584.93
River toll fee 2,080.36 1,046.68
Total 22,216,492.26 33,691,523.62
31. Non-current liabilities due within one year
Item Closing balance Opening balance
Bond payable due within one year 119,400,000.00 24,900,000.00
Long-term payable due within one year 24,636,926.13 29,809,686.93
Lease obligation due within one year 6,608,421.51 8,396,267.63
Total 150,645,347.64 63,105,954.56
32. Other current liabilities
Item Closing balance Opening balance
Notes payable endorsed not
148,957,983.15 127,165,397.88
derecognized
Output Vat to be carried forward 54,357,881.28 77,484,605.36
Total 203,315,864.43 204,650,003.24
33. Long-term borrowing
(1) Category of long-term borrowing
Category Closing Balance Opening Balance
133
Pledged loan 609,700,000.00 585,100,000.00
Guarantee loan 70,000,000.00 130,000,000.00
Total 679,700,000.00 715,100,000.00
Note 1: Pledged loan of 0.6 billion Yuan is for business combination in 2022, which
comprises
0.3 billion Yuan from Dalian Zhoushuizi Branch of China Construction Bank Corporation,
5years with 2.75% borrowing rate. 50% shareholdings of Sonyo Compressor (Dalian)Co., Ltd
and 37.5% shareholdings of Sonyo Refrigeration System (Dalian) Co., Ltd. were pledged. China
Construction Bank Corporation will complete the guarantee in February 2023. 0.3 billion Yuan
from Dalian Branch of Bank of Communications Co., Ltd., 7 years with 2.75% borrowing rate.
50% shareholdings of Sonyo Compressor (Dalian)Co., Ltd and 37.5% shareholdings of Sonyo
Refrigeration System (Dalian) Co., Ltd. were pledged. Dalian Branch of Bank of
Communications Co., Ltd will complete the guarantee in February 2023. In 2024, 40 million
Yuan loan is planned to pay back to Construction bank and 1.44 million Yuan loan to
Communications bank.
Note 2: Pledged loan includes a new loan of 87 million Yuan in 2023 for acquisition of
Sonyo Refrigeration System (Dalian) Co., Ltd. held by Panasonic Corporation of China Co.,
LTD and Sanyo Electric (China)Co., Ltd. The loan is expired by 7 years with 2.75% borrowing
rate. Up to December 31, 2023, the closing balance is 79million Yuan and will be repaid 5
million Yuan in 2024.
Note 3: In year 2016, the Development Fund from China Development Bank gave support
to the Company’s intelligent and green equipment of cold chain and service industry base
project and provided special fund to the Company’s holding shareholder, Bingshan Group. The
fund is160 million Yuan with 10year’s expiration at 1.2% rate. Once the fund arrived, Bingshan
Group gave it to the Company at the same rate of 1.2% in lump sum. The above fund needed to
be warranted by the Company. The guarantee seems to be given for the holding shareholder, but
it is for the Company itself in fact. Up to December 31, 2023, the closing balance is 130 million
Yuan and will be repaid 60 million Yuan in 2024.
134
34. Lease obligation
(1) Details of lease obligation
Category Closing balance Opening balance
Lease payment 38,276,477.18 23,357,885.20
Less: unrecognized finance expense 7,533,068.70 3,731,085.52
Non-current liability due within 1 year 6,608,421.51 8,396,267.63
Net lease liability 24,134,986.97 11,230,532.05
35. Long term accounts payable
Item Closing Balance Opening Balance
Long term accounts payable 10,331,937.30 31,009,644.16
Special fund payable - -
Total 10,331,937.30 31,009,644.16
35.1Category by nature
Nature Closing Balance Opening Balance
Financial lease borrowings 10,331,937.30 31,009,644.16
Total 10,331,937.30 31,009,644.16
36. Provision
Nature Closing Balance Opening Balance Reason
Warranty 4,544,802.88 3,094,982.15 Service after sales
Open litigation - 15,710,985.28 —
Total 4,544,802.88 18,805,967.43 —
37. Deferred income
(1) Category of deferred income
Item Opening Balance Increase Decrease Closing Balance
Government subsidy 99,754,346.39 10,522,129.73 12,002,208.32 98,274,267.80
Total 99,754,346.39 10,522,129.73 12,002,208.32 98,274,267.80
135
(2) Government subsidy
Into non- The value offset Related
Opening Into other Closing
Government subsidy item Increase operating cost and expense Others with asset/
Balance income Balance
income this year income
Contribution to subsidiary Asset
37,876,000.00 - - 1,114,000.00 - - 36,762,000.00
company relocation related
Application of NH3 and CO2
instead of R22 screw Asset
20,506,438.28 - - 1,932,952.12 - - 18,573,486.16
refrigerating machine combined Related
condensing unit
Asset
Eco Compressor project 17,421,621.34 - - 2,553,850.15 - - 14,867,771.19 / Income
related
R290 replacement of R22 large Asset
13,006,663.20 3,251,665.80 - - - - 16,258,329.00
industrial screw unit related
R290 replacement of R22
Asset
industrial double stage screw 4,747,680.00 1,186,920.00 - - - - 5,934,600.00
related
unit
Asset
Compressor IC system 3,169,590.55 - - 368,769.72 - - 2,800,820.83
related
Ultrasonic intelligent defrost Asset
3,006,353.02 - - 414,824.40 - - 2,591,528.62
technology related
Asset
Refrigeration testing APP 20,000.00 - - 20,000.00 - - -
related
136
Into non- The value offset Related
Opening Into other Closing
Government subsidy item Increase operating cost and expense Others with asset/
Balance income Balance
income this year income
2023 AI Innovation
Development Plan Fund-
Income
Government subsidy of - 3,000,000.00 - 3,000,000.00 - - -
related
Liaoning Provincial Department
of Science and Technology -
Income
Brand establishment expenses - 947,718.00 - 947,718.00 - - -
related
Meat storage technology and Income
- 487,400.00 - 1,668.00 - - 485,732.00
equipment related
Income
Digital platform construction - 440,000.00 - 440,000.00 - - -
related
FY2020 Subsidy for key science
and technology research and Income
- 418,500.00 - 418,500.00 - - -
development by Dalian Science related
and Technology Bureau
Study on heat transfer
performance of red water heat Income
- 220,000.00 - 220,000.00 - - -
exchanger and replacement of related
heat exchange tube
137
Into non- The value offset Related
Opening Into other Closing
Government subsidy item Increase operating cost and expense Others with asset/
Balance income Balance
income this year income
Income
Special funds for innovation - 180,000.00 - 180,000.00 - - -
related
FY2023 subsidy by Bureau of Income
- 115,500.00 - 115,500.00 - - -
Science and Technology related
Income
Loan discount - 65,833.33 - 65,833.33 - - -
related
FY2022 Science and Income
- 50,000.00 - 50,000.00 - - -
Technology Awards related
Income
Demonstration subsidy - 50,000.00 - 50,000.00 - - -
related
Dalian Employment and Talent
Service Center government Income
- 28,816.00 - 28,816.00 - - -
subsidy - unemployment related
insurance expansion subsidy
138
Into non- The value offset Related
Opening Into other Closing
Government subsidy item Increase operating cost and expense Others with asset/
Balance income Balance
income this year income
FY2022 Dalian scientific and
technological achievements Income
- 38,000.00 - 38,000.00 - - -
transfer and transformation related
subsidy and award project
Subsidies for the training of Income
- 18,360.00 - 18,360.00 - - -
highly skilled personnel related
Subsidies for college graduates Income
- 15,056.60 - 15,056.60 - - -
and social security subsidies related
Subsidy for employment of
graduates by Dalian Jinpu New Income
- 6,000.00 - 6,000.00 - - -
Area employment and talent related
service center
Income
Subsidy for labor training - 2,360.00 - 2,360.00 - - -
related
Total 99,754,346.39 10,522,129.73 - 12,002,208.32 - - 98,274,267.80 —
Note: Asset related grant shall be offset the cost or expense within the asset’s useful life; income related grant shall be booked into other income or offset cost
or expense if it is relevant to daily activity, otherwise it shall be booked into non-operating income.
139
38.Share capital
Increase/decrease（+/-）
Opening New Transfer
Item Share Closing balance
balance share from capital others Subtotal
dividend
issued reserve
Total
share 843,212,507.00 - - - - - 843,212,507.00
capital
39.Capital reserves
Opening
Items Increase Decrease Closing Balance
Balance
Share premium 669,193,413.27 - - 669,193,413.27
Other capital reserves 47,903,685.11 - - 47,903,685.11
Total 717,097,098.38 - - 717,097,098.38
140
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements
January 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
40.Other comprehensive income
Current year
Opening
Items Amount for the Less：Previously recognized Less： After-tax After-tax attribute Closing Balance
Balance
period before in profit or loss into other income attribute to the to minority
income tax comprehensive income tax parent company shareholder
I.Later can’t reclassified into
profit and loss of other - - - - - - -
comprehensive income
II. Later reclassified into profit
and loss of other 2,208,669.73 - - - - - 2,208,669.73
comprehensive income
Other comprehensive income
that can be transferred to profit 2,208,669.73 - - - - - 2,208,669.73
or loss under the equity method
Other comprehensive income
total 2,208,669.73 - - - - - 2,208,669.73
141
41. Special reserve
Item Opening Balance Increase Decrease Closing Balance
Manufacturing safety - 13,214,150.71 12,764,775.75 449,374.96
Total - 13,214,150.71 12,764,775.75 449,374.96
42.Surplus reserves
Item Opening Closing
Increase Decrease
Balance Balance
Statutory surplus reserve 362,972,224.98 10,426,530.94 - 373,398,755.92
Discretionary surplus reserve 462,249,814.41 31,510,869.01 - 493,760,683.42
Total 825,222,039.39 41,937,399.95 - 867,159,439.34
Note: The Company made profit distribution during the reporting period. According to the
resolution of the 2022 annual General meeting of shareholders, the discretionary surplus reserve
of RMB 31,510,869.01 will be appropriated based on 20% of the net profit of the statutory
financial report for FY2022; Statutory surplus reserve of 10,426,530.94 Yuan shall be
appropriated based on 10% of the net profit of the parent company this year.
142
43.Undistributed profits
Item Current year Last year
Closing balance of last year 618,445,922.58 627,764,582.32
Add: Adjustments to the opening balance of
-65,810.05 -539,927.37
undistributed profits
Including: additional retrospective adjustments
- -
according to the new accounting standards
Change on accounting policy -65,810.05 -539,927.37
Correction of prior period significant errors - -
Change on combination scope under same
- -
control
Other factors - -
Opening balance of current year 618,380,112.53 627,224,654.95
Add: net profit attributable to shareholders of
49,375,900.83 18,255,330.45
parent company in the year
Less: Provision for statutory surplus reserves 10,426,530.94 15,755,434.51
Provision for any surplus reserves 31,510,869.01 -
Provision of general risk - -
Dividends payable for common shares 8,432,125.07 8,432,125.07
Common stock dividends converted to equity - -
Others - 3,386,430.61
Closing balance of current year 617,386,488.34 618,380,112.53
143
44.Operating revenue and cost
(1) Details
Items Current year Last year
Sales revenue Cost of sales Sales revenue Cost of sales
Revenue from principle operation 4,708,789,817.06 3,931,870,621.80 2,803,347,359.37 2,459,913,203.46
Revenue from other operation 107,151,650.64 73,726,836.39 89,737,950.92 77,615,637.94
Total 4,815,941,467.70 4,005,597,458.19 2,893,085,310.29 2,537,528,841.40
(2) Main revenue and COS details
Northeast China Central China Total
Contract classification
Sales revenue Cost of sales Sales revenue Cost of sales Sales revenue Cost of sales
Classified by products 4,613,126,067.20 3,833,847,926.43 202,815,400.50 171,749,531.76 4,815,941,467.70 4,005,597,458.19
Manufacture products 3,212,707,591.48 2,562,240,496.51 144,731,244.58 128,025,645.17 3,357,438,836.06 2,690,266,141.68
Project installation 1,270,182,363.19 1,173,033,479.16 24,480,978.58 22,576,643.32 1,294,663,341.77 1,195,610,122.48
Other products and service 130,236,112.53 98,573,950.76 33,603,177.34 21,147,243.27 163,839,289.87 119,721,194.03
Classified by geography location 4,613,126,067.20 3,833,847,926.43 202,815,400.50 171,749,531.76 4,815,941,467.70 4,005,597,458.19
domestic 4,075,399,244.72 3,437,323,354.01 202,815,400.50 171,749,531.76 4,278,214,645.22 3,609,072,885.77
overseas 537,726,822.48 396,524,572.42 - - 537,726,822.48 396,524,572.42
Timing of goods transferred 4,613,126,067.20 3,833,847,926.43 202,815,400.50 171,749,531.76 4,815,941,467.70 4,005,597,458.19
At a point 4,514,583,069.37 3,736,525,341.06 202,815,400.50 171,749,531.76 4,717,398,469.87 3,908,274,872.82
Over the time 98,542,997.83 97,322,585.37 - - 98,542,997.83 97,322,585.37
Total 4,613,126,067.20 3,833,847,926.43 202,815,400.50 171,749,531.76 4,815,941,467.70 4,005,597,458.19
144
45.Taxes and surcharges
Items Current year Last year
Property tax 10,073,731.86 8,149,841.00
City construction tax 9,012,910.60 3,787,453.40
Education surcharge 6,439,924.63 2,716,374.19
Land use tax 5,015,774.62 4,339,092.94
Stamp duty 3,354,441.63 3,036,523.34
Vehicle and vessel tax 48,250.80 21,640.80
Others 23,642.94 10,700.69
Total 33,968,677.08 22,061,626.36
46.Selling expenses
Items Current year Last year
Employee benefit 141,519,344.86 94,640,905.30
Travel expense 25,719,851.30 12,871,992.12
Official business expense 25,483,586.78 15,487,688.84
Maintenance and repair expense 17,803,113.38 17,886,776.97
Business entertaining expense 15,227,636.78 9,081,381.79
Advertisement and bids expense 4,936,902.38 1,817,387.69
Depreciation expense 2,257,182.91 861,025.06
Other expense 914,408.09 1,088,557.19
Total 233,862,026.48 153,735,714.96
145
47. Administrative expenses
Items Current year Last year
Employee benefit 127,272,720.89 104,233,517.24
Official expense 28,493,919.83 19,600,747.44
Depreciation expense 25,264,201.98 17,450,109.34
Maintenance and repair expense 16,475,833.99 8,558,115.62
Long-term assets amortization 11,646,085.10 7,988,593.35
Patent trade mark use 9,372,566.10 1,139,572.89
Design consultant and test service expense 8,075,373.29 14,255,471.99
Travel expense 6,514,713.45 4,544,965.76
Other taxes and fee 3,686,510.53 841,243.95
Safety production cost 3,062,462.68 2,791,153.21
Business entertaining expense 2,738,569.12 1,664,993.09
Insurance expense 1,435,356.69 830,189.74
Advertisement expense 814,999.22 424,668.21
Transportation expense 47,368.09 204,637.83
Other expense 5,667,564.54 1,850,224.84
Total 250,568,245.50 186,378,204.50
48.Technology development expense
Items Current year Last year
Employee benefit 102,598,481.06 52,660,638.70
Raw material 20,934,040.54 12,253,575.39
Depreciation and amortization expense 14,685,194.95 6,409,516.10
Other expense 25,968,001.16 5,469,075.50
Total 164,185,717.71 76,792,805.69
49.Financial expenses
Items Current year Last year
Interest expenses 37,918,133.57 18,581,726.78
Less: interest income 10,558,433.14 5,850,062.80
Add: exchange loss -299,066.17 -3,698,043.31
Add: others expenditure 3,097,443.21 2,791,902.36
Total 30,158,077.47 11,825,523.03
146
50.Other income
Items Current year Last year
Input VAT accelerated deduction 17,504,090.47 -
Government subsidy 12,002,208.32 6,473,525.00
Insurance premium refund 367,800.00 -
Personal income tax handling fee refund 180,238.52 90,694.36
Job stability subsidy 111,468.81 98,244.00
VAT deduction for recruiting poor people 12,350.00 -
Gain on debt restructuring 1,512.39 119,554.03
Land and property tax preference - 391,094.76
VAT return - 43.32
Total 30,179,668.51 7,173,155.47
51.Gain on fair value change
Source of gain on FV change Current year Last year
Other noncurrent financial assets 14,073,910.32 -46,991,034.40
Total 14,073,910.32 -46,991,034.40
52.Investment income
Items Current year Last year
Long-term equity investment gain under
-4,884,731.99 -37,218,861.27
equity method
Gain from disposal of long-term equity
- 109,098,404.60
investment
Gain from FV remeasurement of the shares
- 170,729,805.79
on obtaining control
Gain from holding of other noncurrent
5,796,799.24 20,671,710.39
financial assets
Gain from disposal of other no-current
- 43,296,525.04
financial assets
Gain on debt restructuring 1,790,089.90 110,913.39
Discounting fees for bank acceptance note -1,595,528.43 -
Dividend received for other equity
- -
instrument held
Total 1,106,628.72 306,688,497.94
147
53.Credit impairment loss (loss listed as “-”)
Items Current year Last year
Bad debt loss on notes receivable 91,074.58 -789,111.45
Bad debt loss on receivable -68,147,779.35 -77,384,660.21
Bad debt loss on other receivable -1,885,950.98 -4,020,227.27
Bad debt loss on long term receivable 210,600.00 -501,389.82
Total -69,732,055.75 -82,695,388.75
54.Assets impairment losses (loss listed as “-”)
Items Current year Last year
Loss on impairment of inventory and cost to
-17,646,037.59 -39,711,456.37
fulfill the contract obligation
Loss of contract asset impairment 4,767,716.49 -30,814,338.63
Impairment on other non-current asset -1,527,371.56 -
Impairment on construction in progress - -4,300,000.00
Total -14,405,692.66 -74,825,795.00
55.Gain on assets disposal (loss listed as “-”)
Item Current year Last year
Gain on non-current assets disposal -1,184,930.14 194,556.13
Including: gain on non-current assets
-1,184,930.14 194,556.13
disposal not classified as held for sale
Including: gain on fixed assets disposal -689,706.84 194,556.13
gain on intangible assets disposal -433,100.00 -
gain on early derecognition of use
-62,123.30 -
right asset
Total -1,184,930.14 194,556.13
148
56. Non-operating income
（1） Non-operating income list
Amounts recognized into
Item Current year Last year non-recurring profit or
loss for the year
Loss claimed reverse 10,206,786.86 - 10,206,786.86
Penalty received 2,021,941.14 6,612,182.54 2,021,941.14
Creditor giving up 1,895,792.78 4,345,157.74 1,895,792.78
Gain on disposal of
93,160.73
non-current asset 39,884.14 39,884.14
Contract withdrawn and
received in advance
- 432,311.90 -
transferred to non-operating
income
Other items 369,517.17 358,715.64 369,517.17
Total 14,533,922.09 11,841,528.55 14,533,922.09
57.Non-operating expenses
Amounts recognized into
Item Current year Last year non-recurring profit or
loss for the year
Non-current assets scrap
5,511,195.40 191,291.12 5,511,195.40
loss
Compensation 952,429.15 2,813,844.43 952,429.15
Outward donation 360,000.00 57,000.00 360,000.00
Expected loss for open
- 2,019,000.00 -
litigation
Others 142,852.98 123,404.80 142,852.98
Total 6,966,477.53 5,204,540.35 6,966,477.53
149
58. Income tax expenses
(1) Income tax expenses
Items Current year Last year
Current income tax expenses 25,126,696.59 5,482.46
Deferred income tax expenses -14,094,997.51 571,333.82
Total 11,031,699.08 576,816.28
(2) Adjustment process of accounting profit and income tax expense
Items Current year
Consolidated total profit this year 65,206,238.83
Income tax expenses at applicable tax rate 9,780,935.82
Effect on subsidiary applied to different tax rate -1,415,501.20
Effect on prior period income tax adjustment 503,530.40
Effect on non-taxable income -657,243.07
Effect on non-deductible cost, expense and loss 1,850,564.14
Effect on use of deductible loss from unrecognized deferred tax
assets in the prior period -546,630.00
Deferred tax assets recognized for prior period temporary
difference -1,127,554.15
Effect on temporary difference or deductible loss from
unrecognized deferred tax assets this year 20,404,968.93
R&D expenditure accelerated deduction -20,664,943.68
Others 2,903,571.89
Income tax expense 11,031,699.08
59. Other comprehensive income
Refer to the note “VI.40 Other comprehensive income” for details.
150
60. Notes to cash flow statement
(1) Cash relevant to operating activities
1) Cash received relevant to operating activities
Items Current year Last year
Deposit returned 56,211,426.27 43,441,397.62
Lease premium received 34,669,117.40 14,641,754.19
Government grants 15,077,248.10 5,669,861.48
Interest income 8,914,720.67 5,128,719.77
rd
Receivable from the 3 party 3,001,285.07 4,656,358.49
Compensation 2,497,389.05 10,248,694.24
Received travel expense refund 1,834,601.94 3,180,530.19
Frozen money refund 550,487.90 3,407,480.07
Others 4,072,381.79 2,065,719.26
Total 126,828,658.19 92,440,515.31
2) Cash paid relevant to operating activities
Items Current year Last year
Expenditure 202,530,612.54 122,463,075.59
Deposit paid 50,899,935.96 89,837,201.58
Frozen accounts 21,363,555.30 209,197.14
Business travel borrowing 8,978,717.58 6,698,577.75
Bank handling charges 3,533,466.20 1,737,635.11
Unsettled AR/AP among non-related party 181,386.21 2,896,588.50
Others 2,935,250.16 8,261,197.76
Total 290,422,923.95 232,103,473.43
(2) Cash relevant to investing activities
1) Significant cash received relevant to investing activities
Items Current year Last year
Cash dividend 44,342,521.09 109,215,313.16
2) Significant cash paid relevant to investing activities
Items Current year Last year
Purchase of long-term asset 89,321,945.50 50,713,747.56
3) Other cash paid relevant to investing activities
Items Current year Last year
151
Fixed-term deposit 168,000,000.00 -
(3) Cash relevant to financing activities
1) Other cash received relevant to financing activities
Items Current year Last year
Notes payable to supplier 55,956,005.87 -
Sale leaseback and financial lease 6,600,000.00 12,000,000.00
Notes discounted 3,119,926.93 11,991,047.27
Total 65,675,932.80 23,991,047.27
2) Others cash paid relevant to financing activities
Items Current year Last year
Payment of guarantee money 39,502,750.62 -
Notes payable to supplier 13,629,318.00 -
Sale& leaseback and financial lease 10,891,978.68 25,415,743.25
Lease premium payable 6,585,497.64 3,713,373.61
Discount interest on credit letter 80,863.54 -
Total 70,690,408.48 29,129,116.86
152
3) Changes on liability relevant to financing activities
Increased Decreased
Opening
Items Closing Balance
Balance Non- cash Non- cash
Cash change Cash change
change change
Short-term borrowings 274,052,990.15 298,643,636.90 10,207,457.33 314,000,000.00 6,616,300.00 262,287,784.38
Long-term borrowings 715,100,000.00 87,000,000.00 - 27,900,000.00 94,500,000.00 679,700,000.00
Lease liability 11,230,532.05 - 29,093,821.83 15,982,846.23 206,520.68 24,134,986.97
Non-current liability due -
within one year 63,105,954.56 104,016,474.87 14,960,912.15 1,516,169.64 150,645,347.64
Long-term payable 31,009,644.16 6,600,000.00 10,845,763.56 22,948,324.57 15,175,145.85 10,331,937.30
Other payable-supplier
platform - 55,956,005.87 137,410,509.60 13,629,318.00 - 179,737,197.47
Total 1,094,499,120.92 448,199,642.77 291,574,027.19 409,421,400.95 118,014,136.17 1,306,837,253.76
153
61. Supplementary information of consolidated cash flow statement
(1) Information
Items Current year Last year
1. Adjusting net profit into cash flows of operating
—— ——
activities:
Net profit 54,174,539.75 20,366,757.66
Add: Provision for impairment of assets 14,405,692.66 74,825,795.00
Provision for impairment of credit 69,732,055.75 82,695,388.75
Depreciation of fixed assets, Amortization of
135,625,135.60 82,258,092.89
mineral resources, and biological assets
Depreciation of right-of-use assets 11,340,839.21 3,709,086.79
Amortization of intangible assets 13,570,693.11 10,478,529.57
Amortization of long-term deferred expenses 1,545,642.28 1,455,157.51
Losses on disposal of fixed assets, intangible assets,
1,184,930.14 -194,556.13
and long-term assets (income listed with”-”)
Losses on write-off of fixed assets (income listed
5,471,311.26 98,130.39
with”-”)
Change of fair value profit or loss -14,073,910.32 46,991,034.40
Financial expense (income listed with”-”) 37,918,133.57 18,581,726.78
Investment loss (income listed with”-”) -1,106,628.72 -306,688,497.94
Decrease of deferred tax assets (increase listed
-21,471,717.58 9,978,391.90
with”-”)
Increase of deferred tax liabilities (decrease listed
864,530.06 -9,407,058.08
with”-”)
Decrease of inventories (increase listed with”-”) -257,408,322.60 -412,972,663.16
Decrease of operating receivables (increase listed
-500,972,621.69 -1,052,478,135.51
with”-”)
Increase of operating payables (decrease listed
424,759,029.78 1,374,055,519.82
with”-”)
Others - -
Net cash flows arising from operating activities -24,440,667.74 -56,247,299.36
2. Significant investment and financing activities
— —
unrelated to cash income and expenses
Liabilities transferred to capital - -
Convertible bonds within 1 year - -
Financing leased fixed assets - -
3. Net increase (decrease) of cash and cash — —
154
Items Current year Last year
equivalent
Closing balance of cash 670,440,335.98 921,661,803.17
Less: Opening balance of cash 921,661,803.17 438,969,337.87
Add: Closing balance of cash equivalent - -
Less: Opening balance of cash equivalent - -
Net increase of cash and cash equivalent -251,221,467.19 482,692,465.30
(2) Net cash paid to acquisition of subsidiary
Items Current year
Cash & cash equivalent paid for acquisition 145,285,500.00
Sonyo Refrigeration (Dalian) Co., Ltd. 145,285,500.00
Less: Cash & cash equivalent held by acquirees on acquisition date 133,228,548.98
Sonyo Refrigeration (Dalian) Co., Ltd. 133,228,548.98
Add: Cash & cash equivalent paid for prior period’s acquisition -
Net cash paid to acquisition of subsidiary 12,056,951.02
(3) Cash and cash equivalents
Items Current year Last year
Cash 670,440,335.98 921,661,803.17
Including: Cash on hand 70,750.93 80,702.47
Bank deposit used for paying at any moment 670,303,450.55 921,581,100.70
Other monetary fund for paying at any moment 66,134.50 -
Deposit fund in central bank available for payment - -
Cash equivalent - -
Including: bonds investment with maturity in 3 months - -
Closing balance of cash and cash equivalents 670,440,335.98 921,661,803.17
Cash and cash equivalents with restriction within the
- -
Company and its subsidiaries of the group
155
(4) Monetary fund not belonging to cash and cash equivalent
Items Current year Last year Reasons
Fixed term deposit 168,000,000.00 - Held to maturity
Guarantee money for bank
44,200,486.65 48,567,322.04 Guarantee money
acceptance note
Guarantee money for guarantee
41,547,977.10 33,697,941.99 Guarantee money
letter
Frozen 21,578,536.32 550,487.90 Frozen
Interest receivable 2,321,702.76 959,002.78 Held to maturity
Rural workers’ salary account
1,731,234.30 - Special account
restriction
Rural workers guarantee fund 1,219,297.00 729,341.30 Guarantee money
Total 280,599,234.13 84,504,096.01 —
62. Change of shareholder’s equity
None
63. Monetary category of foreign currency
(1) Monetary category of foreign currency
Closing Balance Exchange
Item Closing Balance (RMB)
(foreign currency) Rate
Cash — — —
Including：USD 833,133.93 7.0827 5,900,837.69
JPY 106,591,562.00 0.0502 5,352,282.10
Euro 44,150.36 7.8592 346,986.51
HK$ 93,239.38 0.9062 84,495.39
Accounts receivable — — —
Including: USD 7,081,806.85 7.0827 50,158,313.38
JPY 76,615,583.00 0.0502 3,847,098.27
Euro 690,473.72 7.8592 5,426,571.06
Accounts payable — — —
Including: USD 1,124,814.88 7.0827 7,966,726.35
JPY 35,741,667.00 0.0502 1,794,696.33
Other accounts payable — — —
Including: JPY 8,304,510.00 0.0502 416,994.36
156
64. Lease
(1) As a lessee
Items Current year Last year
Interest expense on lease liabilities 1,043,053.19 1,259,087.12
Short-term lease expense recognized in income statement 4,114,059.87 1,650,882.62
Low-value asset lease expense recognized in income
statement (excl short-term lease) - -
Income from the sublease of the right-of-use the assets - -
Sum of cash outflows related to leases 8,453,910.59 5,364,256.23
Cash inflow from sale and leaseback transactions 6,600,000.00 12,000,000.00
Cash outflow from sale and leaseback transactions 10,891,978.68 25,415,743.25
(2) As a lessor
Operating lease
Include: income related to variable lease
Items Lease income payments not included in lease payment
receivable
Office and plant 28,888,128.11 -
Apartment 106,380.96 -
Total 28,994,509.07 -
65. Research and development expense
Items Current year Last year
Labor cost 102,598,481.06 52,660,638.70
Material cost 20,934,040.54 12,253,575.39
Depreciation and amortization 14,685,194.95 6,409,516.10
Others 25,968,001.16 5,469,075.50
Total 164,185,717.71 76,792,805.69
Expensed R&D 164,185,717.71 76,792,805.69
Capitalized R&D - -
157
VII. Change of Consolidation Scope
1. Business combination not under same control
(1) Business combination not under same control this year
Share Information between acquisition date and the year
Acquisition Basis for determining end
Acquire acquisition Cost (%) Method
date acquisition date
point Revenue Net profit cashflow
Sonyo
Refrigeration Purchase
2023-6-2 145,285,500.00 100.00 2023-6-2 Transfer of control 253,806,212.28 3,987,334.85 -82,362,599.35
(Dalian) Co., with cash
Ltd.
158
(2) Combination cost and goodwill
Sonyo Refrigeration
Item
(Dalian) Co., Ltd.
Cash 145,285,500.00
FV of non-cash asset -
FV of shareholding held prior to acquisition on acquisition date -
Total of combination cost 145,285,500.00
Less: proportion of FV of identifiable net asset obtained 107,228,836.48
The difference between goodwill/cost of combination less and
proportion of FV of identifiable net asset obtained 38,056,663.52
(3) Identifiable asset, liability of acquiree on acquisition date
Sonyo Refrigeration (Dalian) Co., Ltd.
Items
FV on acquisition date BV on acquisition date
Assets: 780,585,239.05 701,851,729.23
Monetary funds 135,690,886.90 135,690,886.90
Accounts receivable 140,250,048.25 140,250,048.25
Prepayment 5,562,914.24 5,562,914.24
Inventory 299,313,831.40 299,313,831.40
Other equity instrument investment 1,717,629.40 1,336,959.00
Fixed asset 112,691,400.61 50,374,134.76
Construction in process 1,324,905.50 1,324,905.50
Right-of-use asset 6,736,919.97 6,736,919.97
Intangible asset 36,748,493.16 20,712,919.59
Deferred tax asset 7,512,572.08 7,512,572.08
Other current asset 33,035,637.54 33,035,637.54
Liability: 673,356,402.57 661,546,376.10
Accounts payable 588,702,714.87 588,702,714.87
Employee payable 32,347,444.78 32,347,444.78
Lease liability 7,287,087.48 7,287,087.48
Deferred Tax liability 11,810,026.47 -
Other current liability 33,209,128.97 33,209,128.97
Net asset 107,228,836.48 40,305,353.13
les：Minority interest - -
Net asset obtained 107,228,836.48 40,305,353.13
159
(4) Others
None.
VIII. Interest in other entity
1.Equity of subsidiaries
(1) Organization structure of group company
Registered Main Shareholding (%)
Registere Obtaining
Name of subsidiaries capital business Business nature
d address Direct Indirect method
（10K） address
Dalian Bingshan Group
30,000.00 Dalian Dalian Installation 100 - Establish
Engineering Co., Ltd.
Chengdu Bingshan
Refrigeration 1,000.00 Chengdu Chengdu Service - 51 Establish
Engineering Co., Ltd.
Dalian Bingshan Group
1,800.00 Dalian Dalian Trading 100 - Establish
Sales Co., Ltd.
Dalian Bingshan
Air-conditioning 8,254.00 Dalian Dalian Manufacturing 100 - Establish
Equipment Co., Ltd.
Dalian Bingshan
Guardian Automation 5,070.07 Dalian Dalian Manufacturing 100 - Establish
Co., Ltd.
Dalian
Bingshan-RYOSETSU
5,757.87 Dalian Dalian Manufacturing 100 - Establish
Quick Freezing
Equipment Co., Ltd.
Wuhan New World
Refrigeration Industrial 20,000.00 Wuhan Wuhan Manufacturing 100 - Acquisition
Co., Ltd.
Wuhan New World
Air-conditioning
3,500.00 Wuhan Wuhan Installation - 100 Establish
Refrigeration
Engineering Co., Ltd
Wuhan Lanning Energy
2,200.00 Wuhan Wuhan Trading - 100 Acquisition
Technology Co., Ltd.
Dalian Universe Thermal 8,000.00 Dalian Dalian Manufacturing 55 - Acquisition
160
Name of subsidiaries Registered Main Registere Business nature Shareholding (%) Obtaining
capital business d address method
Technology Co., Ltd. （10K） address
Dalian Bingshan
Engineering & Trading 3,000.00 Dalian Dalian Service 100 - Acquisition
Co., Ltd
Sonyo Compressor
44,239.67 Dalian Dalian Manufacturing 100 - Acquisition
(Dalian)Co., Ltd.
Sonyo Refrigeration
10,500.00 Dalian Dalian Manufacturing 100 - Acquisition
System (Dalian) Co., Ltd.
Sonyo Refrigeration
21,208.47 Dalian Dalian Manufacturing 100 - Acquisition
(Dalian) Co., Ltd.
1) All the proportion of shareholding in subsidiaries were the same with voting right.
2) The Company held over 50% voting right in subsidiaries and could control these
subsidiaries with over 50% voting right.
(2) There are no significant non-subsidiaries.
2.Change of equity share in subsidiary which is still under control
（1） Change of equity share in subsidiary
None.
161
3.Equity in joint venture arrangement or associated enterprise
（1） The important affiliated companies
Shareholding (%)
Main
Name of joint ventures or Registered Business Accounting
business
affiliated companies address nature methods
address
Direct Indirect
Dalian Fuji Bingshan Equity
Vending Machine Co., Ltd Dalian Dalian Manufacturing 49.00 -
method
Jiangsu Jingxue Insulation Equity
Changzhou Changzhou Manufacturing 14.91 -
Technology Co., Ltd method
Dalian Bingshan Metal Equity
Dalian Dalian Manufacturing 49.00 -
Technology Co., Ltd. method
1) The Company has the same percentage of shareholding and voting right in joint-venture or
affiliated company.
2) The Company doesn’t have joint venture or affiliated companies which have no significant
influence although being held 20% or more voting rights.
162
（2） The key financial information of affiliated companies
Closing balance/Current year
Items Dalian Fuji Bingshan Vending Jiangsu Jingxue Insulation Dalian Bingshan Metal
Machine Co., Ltd Technology Co., Ltd Technology Co., Ltd.
Current assets 279,515,256.77 1,513,841,724.68 334,413,727.30
Including: Cash and cash equivalents 18,195,178.30 151,387,053.19 163.052.296.71
Non-current assets 190,659,275.57 301,638,618.76 38,148,931.23
Total assets 470,174,532.34 1,815,480,343.44 372,562,658.53
Current liabilities 300,289,317.09 943,431,015.22 58,315,558.14
Non-current liabilities 32,367,401.38 40,353,776.15 -
Total liabilities 332,656,718.47 983,784,791.37 58,315,558.14
Total net asset 137,517,813.87 831,695,552.07 314,247,100.39
Minority interests - 274,736.66 -
Equity to the parent company 137,517,813.87 831,420,815.41 314,247,100.39
Share of net assets according to the
shareholding proportions 67,383,728.80 123,964,843.58 153,981,079.19
Adjusting events - - -
—Goodwill 226,689.29 20,390,060.33 19,269,770.94
—Unrealized profits of insider trading - - -
--Others - - -
Book value of equity investment of
affiliated companies 67,610,418.09 144,354,903.91 173,250,850.13
163
Closing balance/Current year
Items Dalian Fuji Bingshan Vending Jiangsu Jingxue Insulation Dalian Bingshan Metal
Machine Co., Ltd Technology Co., Ltd Technology Co., Ltd.
Fair value of equity investment with public
offer - - -
Operating income 209,845,287.10 1,152,098,034.96 464,881,380.24
Financial expense 11,084,822.85 1,934,530.46 -2,682,355.04
Income tax expense -353,797.35 4,996,495.33 10,449,723.61
Net profit -85,684,074.85 38,019,504.83 63,729,802.01
Net profit of discontinuing operation - - -
Other comprehensive income - - -
Total comprehensive income -85,684,074.85 38,019,504.83 63,729,802.01
The current dividends received from joint
ventures - 1,610,172.00 33,134,422.30
164
(Continued)
Opening balance/Last year
Items Dalian Fuji Bingshan Vending Jiangsu Jingxue Insulation Dalian Bingshan Metal
Machine Co., Ltd Technology Co., Ltd Technology Co., Ltd.
Current assets 447,012,221.67 1,357,769,579.89 331,577,731.99
Including: Cash and cash equivalents 8,768,885.75 210,766,589.69 171,454,780.42
Non-current assets 220,481,862.47 302,638,265.60 36,680,264.69
Total assets 667,494,084.14 1,660,407,845.49 368,257,996.68
Current liabilities 391,692,836.48 827,081,128.54 49,800,779.28
Non-current liabilities 49,526,450.43 29,830,925.61 -
Total liabilities 441,219,286.91 856,912,054.15 49,800,779.28
Total net asset 226,274,797.23 803,046,200.14 318,457,217.40
Minority interests - 449,591.20 -
Equity to the parent company 226,274,797.23 803,046,200.14 318,457,217.40
Share of net assets according to the
110,874,650.64 119,734,188.43 156,044,036.52
shareholding proportions
Adjusting events - - -
—Goodwill 226,689.29 20,390,060.33 19,269,770.94
—Unrealized profits of insider trading - - -
--Others - -
Book value of equity investment of
111,101,339.93 140,124,248.76 175,313,807.46
affiliated companies
Fair value of equity investment with public - - -
165
Opening balance/Last year
Items Dalian Fuji Bingshan Vending Jiangsu Jingxue Insulation Dalian Bingshan Metal
Machine Co., Ltd Technology Co., Ltd Technology Co., Ltd.
offer
Operating income 175,460,421.16 902,517,681.24 433,120,778.54
Financial expense 10,357,794.72 854,477.47 -7,161,210.92
Income tax expense -10,755.71 2,621,080.54 9,728,042.54
Net profit 2,430,819.76 39,722,362.41 62,395,419.10
Net profit of discontinuing operation - - -
Other comprehensive income - - -
Total comprehensive income 2,430,819.76 39,722,362.41 62,395,419.10
The current dividends received from joint
- 4,732,344.00 23,402,022.05
ventures
166
（3） Summary financial information of insignificant affiliated companies
Items Current year Last year
Affiliated company — —
Total book value of investment of affiliated
companies 136,058,775.37 123,418,337.24
The total of following items according to the
shareholding proportions — —
Net profit 3,826,157.59 28,021,453.13
Other comprehensive income - -
Total comprehensive income 3,826,157.59 28,021,453.13
（4） Significant restrictions of the ability of affiliated companies transferring funds to
the Company.
No.
（5） Contingency related to joint venture or affiliated company need to be disclosed.
No.
IX. Government Grant
1. Liability item involved in government grant
Into non- The value Related to
Opening Into other Closing
Items Increase operating offset cost asset/
Balance income Balance
income and expense income
Deferred
82,332,725.05 4,438,585.80 - 3,850,546.24 - 82,920,764.61 asset
income
Deferred asset/inco
income 17,421,621.34 487,400.00 - 2,555,518.15 - 15,353,503.19
me
Deferred
- 5,596,143.93 - 5,596,143.93 - - income
income
Total 99,754,346.39 10,522,129.73 - 12,002,208.32 - 98,274,267.80 —
2. Recognized in income statement
Items Current year Last year
Other income 12,002,208.32 6,473,525.00
Administration expense - -5,306,977.43
167
X. Risk Related to Financial Instruments
The main financial instruments held by the group are borrowings, accounts receivable, accounts
payable, other non-current financial asset etc. The detailed explanation is referred to the note
No.VI. The related risks of these financial instruments and the risk management policy
conducted to reduce these risks by the group are introduced as below. The group management
conducts to manage and monitor these risks exposure and control these risks under certain risk
level.
1. Objectives and policies of each risk management
The objectives of risk management conducted by the Company are to reach the balance between
risk and profit return by reducing the negative influence to operating performance to the
minimum level as well as maximizing the shareholders’ and other investors’ profits. Based on
these objectives, the basic risk management policy is to recognize and analyze all sorts of risk
that the Company faced with, to set up the proper risk tolerance bottom line conducting risk
management, as well as to monitor these risks in a timely and effective manner, and to ensure
these risks under the limit level.
(1) Market risk
1) Exchange rate risk
Most of the Company’s business is located in China, and settled with RMB. But the Company
defined exchange rate risk of assets, liabilities dominated in foreign currency and future
transaction dominated in foreign currency (mainly including USD, JPY, EURO, HKD and GBP).
The financial department of the Company monitors the Company’s foreign currency transaction
and the scale of foreign assets and liabilities, and decreases exchange rate risk. During the
current year the Company did not agree any forward foreign exchange contract or currency
swap contract .As at 31st December 2023, the Company’s assets and liabilities dominated in
foreign currency are listed in RMB as following：
168
Items December 31, 2023 December 31, 2022
Monetary fund-USD 5,900,837.69 5,254,881.87
Monetary fund-JPY 5,352,282.10 1,367,327.65
Monetary fund- EURO 346,986.51 1,354,512.09
Monetary fund- HKD 84,495.39 -
Receivable -USD 50,158,313.38 40,859,881.78
Receivable -JPY 3,847,098.27 2,715,738.67
Receivable - EURO 5,426,571.06 7,467,708.34
Payables -USD 7,966,726.35 5,849,006.89
Payables -JPY 1,794,696.33 1,873,402.54
Payables - GBP - 312,884.03
The group paid close attention to the effect on FX risk.
2) Interest rate risk
The interest risk of the group incurred from bank loan, risk of a floating interest rate of financial
liabilities that lead to the group facing cash flow interest rate risk, financial liabilities with a fixed
interest rate lead to the group facing cash flow interest rate risk. The company determined the proportion
of fixed interest rate and floating interest rate according the current market circumstance. The group’s
interest-bearing debt is borrowings of RMB 799,000,000.00 at fixed interest rate as of December
31,2023(borrowings of RMB 740,000,000.00 in2022).
The financial department of the group continuously monitors the interest rates level, and the
management would make some adjustment to lower the interest rate risk according to the latest market
situation. Climbing interest rate will increase the cost of newly increased interest-bearing liability and
interest expense for unsettled interest-bearing liability at floating rate and have adverse effect on the
business performance.
The sensitive analysis：
As at 31st December 2023, based on the assumption of interest rate change of 50 BP, the group’s net
profit of current year will increase or decrease3.9955 million Yuan.
3) Price risk
The price risk of the Company is mainly commodity price risk. The Company sells products at market
prices. As the national economy enters the "new normal", the manufacturing industry is under great
economic downward pressure, and the drastic fluctuations of bulk material prices have a certain impact
on the group 's operations.
(2) Credit risk
169
The credit risk of the group comes from monetary fund, notes receivable, accounts receivable, and other
accounts receivable etc. The management made credit policies and monitored changes of this credit
exposure.
The group 's monetary fund was in bank with higher credit rating, so there was no significant credit risk,
nor significant losses due to the default of other entity. Upper limit policy is adopted to avoid any credit
risk from financial institution.
The group made relevant policy to control credit risk exposure from receivable, other receivable and
notes receivable. The group assesses the client’s credit background according to the client’s financial
performance, possibility of obtaining guarantee from the 3rd party, credit record and other factors such
as current market. The group will periodically monitor the credit situation of the client and will take
measures such as prompt letter, shorten credit period or cancel the credit to ensure the overall credit risk
within the controllable scope.
As at 31st December 2023, the top five customers of receivable accounts balance are
240,544,632.79Yuan.
(3) Liquidity risk
Liquidity risk was referred to the risk of shortage of funds incurred when the enterprise fulfills the
obligation of settlement by cash or other financial assets. The way to manage the liquidity risk is to
ensure enough fund available to fulfill the liability by due date in prevention from unacceptable loss of
or reputation damage to the group. The group periodically analyze the liability structure and expiry date
and the financial department of the group continued to monitors the short term or long-term capital
needs to ensure maintain plenty of cash flow. And the same time they also monitor the condition of bank
loan agreements and obtain commitments from banks to reduce liquidity risks.
The fund mainly comes from bank loan. By December 31st, 2023, the credit limit still available is 618.30
million Yuan and short-term credit limit available is 618.30 million Yuan.
As at 31st December 2023, the group’s financial assets and financial liabilities in line with
non-discounted cash flow of the contracts as following：
170
Currency unity:10kYuan
Within 1
Items 1-2 years 2-5 years Over 5 years Total
year
Financial Assets — — — — —
Cash and cash in bank 95,103.96 - - - 95,103.96
Notes receivable 35,342.89 - - - 35,342.89
Accounts receivable 157,643.39 - - - 157,643.39
Financing receivable 30,358.52 - - - 30,358.52
Other Receivable 4,138.17 - - - 4,138.17
Contract asset 23,707.69 - - - 23,707.69
Other current asset 2,607.43 - - - 2,607.43
Other non-current
- - - 16,402.48 16,402.48
financial asset
Financial Liabilities — — — — —
Short-term loan 26,228.78 - - - 26,228.78
Notes Payable 67,072.10 - - - 67,072.10
Accounts payable 165,583.54 - - - 165,583.54
Other payable 27,880.42 - - - 27,880.42
Employee’s payable 14,949.71 - - - 14,949.71
Tax payable 2,221.65 - - - 2,221.65
Non-current liability
15,064.53 - - - 15,064.53
due within 1 year
Long-term loan - 34,600.00 32,570.00 800.00 67,970.00
Lease obligation - 561.13 881.77 970.60 2,413.50
Long-term payable - 208.75 824.44 - 1,033.19
171
2. Financial asset transfer
(1) Classified by transfer method
Transfer
Nature Amount Derecognition Basis for derecognition
method
Bank acceptance
Endorsement All risk and reward
bill with high credit 374,572,818.64 Y
of a bill have been transferred
rating
Bank acceptance
Discounting All risk and reward
bill with high credit 151,620,157.02 Y
a bill have been transferred
rating
Bank/trade
Endorsement Retain mostly risk and
acceptance bill with
/discounting 151,582,675.36 N reward including
non-high credit
of a bill default risk
rating
All risk and reward
Factoring Receivable 10,000,000.00 Y
have been transferred
Total — 687,775,651.02 — —
(2) Derecognized financial asset due to transfer
Derecognized Gain/loss from
Item Transfer method
Amount derecognition
Bank acceptance bill with
Endorsement of a bill 374,572,818.64 -
high credit rating
Bank acceptance bill with
Discounting a bill 151,620,157.02 -1,944,537.05
high credit rating
Factoring without
Receivable 10,000,000.00 -
recourse
Total — 536,192,975.66 -1,944,537.05
XI. Disclosure of Fair Value
1. Amount and measurement level of the assets and liabilities measured at fair value at the year
end
172
Fair value at the year end
1st level 2nd level 3rd level
Items
measurement of measurement of measurement of Total
FV FV FV
Financial assets
Continuously — — — —
measured at FV
Receivable financing - 303,585,218.53 - 303,585,218.53
Other non-current
162,340,919.04 - 1,683,852.59 164,024,771.63
financial asset
Total 162,340,919.04 303,585,218.53 1,683,852.59 467,609,990.16
2. Basis for Market price of first level measurement of fair value
Equity instrument portion of the other noncurrent financial asset is measured at the unadjusted
closing quoted price of Guotai Junan shares on stock market on December 29, 2023.
3. For continuous and discontinuous 2nd level of FV, valuation technique adopted and
key parameter quantitive and qualitive information.
Bank acceptance notes (receivable financing) as measured at fair value through other
comprehensive income is within this scope. Bank acceptance notes held by the group mainly
are high credit grading from the large commercial bank. As the remaining maturity is short and
credit risk is very low, on the balance sheet date, the book value of bank acceptance notes
receivable is similar to fair value.
4. For continuous and discontinuous 3rd level of FV, valuation technique adopted and
key parameter quantitive and qualitive information.
As of December 31, 2023, the book value of the share investment in Guotai Junan Investment
Management Co.,Ltd and Wuhan Steel and Power Co.,Ltd is 1,683,852.59 Yuan. It is
presented as other non-current financial asset in accordance with No.22- financial instrument
recognition and measurement of Accounting Standards for Business Enterprises. Having
considered there is neither active market for invested company’s share nor market price is
available for reference, and it is not feasible to obtain the relevant observable input value. FV
of the investment is measured at cost by taking influence factor of FV into consideration.
5. For continuous 3rd level of FV, adjusted information of opening and closing balance
and sensitivity analysis of unobservable parameter.
173
No.
6. Assets continuously measured at fair value have switched among different level during
the year.
No.
7. Changes of valuation technique and reasons for changes
No.
8. Assets and liability are disclosed at FV rather than measured at FV
No.
XII. Related Parties Relationship and Transactions
i. Related parties’ relationship
1. Controlling shareholder and ultimate controller
(1) Controlling shareholder and ultimate controller
Voting
Shareholding
Parent Registered Business Registered power
percentage
company address nature capital（10K） percentage
(%)
(%)
Dalian
Bingshan
Dalian Manufacture 15,858.00 20.27 20.27
Group Co.,
Ltd.
Note: Dalian Bingshan Group Co., Ltd. is a Sino –foreign joint venture located No.106 Liaohe
East Road, DDZ, Dalian, China. The legal representative of Dalian Bingshan Group Co., Ltd. is
Mr. Ji Zhijian, and the registered capital is RMB158.58 million. The registered business
operation period is from 3rd July 1985 to 2nd July 2035. The business scope includes research,
development, manufacture, sales, service and installment of refrigeration equipment, cooling
and freezing equipment, different size of air-conditioners, petrochemical equipment, electronic
and electronic- control products, home electronic appliance, environment protect equipment and
etc. (unless the licenses needed)
The Company’s ultimate controller is Dalian Bingshan Group Co., Ltd.
2. Subsidiaries
Referrer to the content in the Note “VIII. 1. (1) Organization structure of group company”.
174
3. Affiliated company and joint venture
The information of the affiliated company and joint venture please refers to the note “VIII. 3.(1)
The significant affiliated company and joint venture’. The Company had transactions with
related parties during the current period or last period, including:
Names of the joint ventures or affiliated company Relationships with the Company
Keinin-Grand Ocean Thermal Technology (Dalian)
Affiliated company of the Company
Co., Ltd.
Dalian Fuji Bingshan Vending Machine Co., Ltd. Affiliated company of the Company
Dalian Fuji Bingshan Vending Machine Sales Co.,
Affiliated company of the Company
Ltd.
Jiangsu Jingxue Insulation Technology Co., Ltd. Affiliated company of the Company
MHI Bingshan Refrigeration (Dalian) Co., Ltd. Affiliated company of the Company
Dalian Honjo Chemical Co., Ltd. Affiliated company of the Company
Dalian Bingshan Metal Technology Co., Ltd. Affiliated company of the Company
Dalian Bingshan Group Huahuida Financial Leasing
Affiliated company of the Company
Co., Ltd.
Wuhan Sikafu Power Control Equipment Co., Ltd. Affiliated company of its subsidiary
Dalian Bingshan Group Huayida Commercial
Subsidiary of its affiliated company
Factoring Co., LTD
Dalian Jingxue Freezing Equipment Co., Ltd. Subsidiary of its affiliated company
Shanghai Jingxue Freezing Equipment Co., Ltd. Subsidiary of its affiliated company
Jiangsu Jingxue Insulation Environmental
Subsidiary of its affiliated company
Engineering Co., Ltd.
4. Other related parties
Name of related party Related party relationship
Company under direct/indirect Control of Panasonic Both parties are under the control of or significant
Co., Ltd influence by the same party
Both parties are under the control of or significant
Sanyo Corporation
influence by the same party
Panasonic Corporation of China Co., Ltd Directors of the Company also serve as directors
Both parties are under the control of or significant
Dalian Spindle Environmental Facilities Co., Ltd.
influence by the same party
LINDE HYDROGEN FUELTECH (DALIAN) CO., Both parties are under the control of or significant
LTD. influence by the same party
Both parties are under the control of or significant
Dalian Shentong Electric Co., Ltd. influence by the same party from January to April,
2023
Both parties are under the control of or significant
Dalian Fuji Bingshan Control System Co., Ltd.
influence by the same party
175
Name of related party Related party relationship
Both parties are under the control of or significant
BAC Dalian Co., Ltd.
influence by the same party
Both parties are under the control of or significant
Dalian Bingshan Wisdom Park Co., Ltd
influence by the same party
Dalian Bingshan Part Technology Co., LTD. Under control of the same ultimate controlling party
Alphavita Bio-scientific (Dalian) Co., Ltd. Under control of the same ultimate controlling party
Bingshan Technology Service （Dalian） Co., Ltd. Under control of the same ultimate controlling party
Directors and senior officers of the Company serve
as directors and senior officers in Dalian
Dalian Zhonghuida Refrigeration Technology Co., Ltd
Zhonghuida Refrigeration Technology Co., Ltd
Company
Both parties are under the control of or significant
Sonyo Cold Chain (Dalian) Co., Ltd. influence by the same party from April to
December, 2023
Note: Companies under direct/indirect Control of Panasonic Co., Ltd are:
Panasonic Electric Taiwan Co.,Ltd, Wanbao(Guangzhou) Compressor Co.,Ltd, Panasonic
Electronic Devices(Jiangmen)Co.,Ltd, Panasonic R&D Center Suzhou Co.,Ltd Dalian Branch,
Panasonic Procurement(CHINA)Co.,Ltd, Panasonic Industry (China) Co., Ltd. Panasonic
Corporation, Panasonic Industry (China) Co., Ltd Shanghai Branch, Beijing 2nd Branch of
Panasonic Electric Equipment (China）Co.,Ltd, Panasonic Electric Equipment (China）Co.,Ltd,
Panasonic Appliances Air-Conditioning and Refrigeration Corporation, Panasonic Appliances
Microwave Oven(Shanghai) Co.,Ltd, Panasonic Motor(Hangzhou)Co.,Ltd., Panasonic Home
Appliances Air-Conditioning(Guangzhou)Co.,Ltd., Panasonic Hong Kong Co., Limited,
PANASONIC PROCUREMENT (CHINA) CO., LTD. Sonyo Refrigeration (Dalian) Co.,
Ltd.(Jan-May, 2023), Sonyo Cold Chain (Dalian) Co., Ltd.( (Jan-Mar, 2023).
Panasonic Appliances Air-Conditioning Malaysia SDN BHD, Panasonic Taiwan CO.,LTD.,
Panasonic Sales Taiwan CO.,LTD, Panasonic Procurement Malaysia SDN BHD, Panasonic
Hong Kong Co.,Ltd, Panasonic Operational Excellence Co.,Ltd.(Pex), Panasonic Life Solutions
India, Panasonic Industry Sales Asia, Panasonic Industry Europe GmbH, Panasonic Industrial
Devices Sales, Panasonic India Pvt Ltd(APIN), Panasonic Global Procurement, Panasonic
DoBrasil Limited–Miam, Panasonic Corporation Appliances Company Heating&Cooling
Solutions Bd Commercial Air-Conditioning, Panasonic Corporation Appliances Company,
Panasonic Corporation, Panasonic Commercial Equipment Systems Taiwan Co.Ltd, Panasonic
Commercial Equipment Systems Asia, Panasonic Automotive&Industrial, Panasonic Appliances
Air-Conditioning Malaysia Sdn.BHD, Panasonic Appliances Air-Conditioning, Pacific.
Panasonic Commercial Equipment Systems Asia Pacific, Panasonic Heating&Ventilation,
Panasonic Appliances Air-conditioning, Panasonic A.P. SALES (THAILAND) CO., LTD
ii. Related Party transactions
1. Purchase of goods, offer and receive labour services etc inter-group transactions
176
(1) Purchase of goods/receive labour services
Related party Content Current year Last year
Dalian Bingshan Metal Technology
Purchases of goods 63,809,032.17 10,017,493.41
Co., Ltd.
Sonyo Cold Chain (Dalian)Co. Ltd Purchases of goods 40,499,927.26 135,529.36
Jiangsu Jingxue Insulation
Purchases of goods 28,067,092.90 5,390,801.78
Technology Co., Ltd.
BAC Dalian Co., Ltd. Purchases of goods 18,579,088.19 32,827,251.97
Company under direct/indirect
Purchases of goods 13,763,555.55 24,447,037.82
Control of Panasonic Co., Ltd
Dalian Bingshan Part Technology
Purchases of goods 10,775,437.38 10,938,171.74
Co., LTD.
Dalian Honjo Chemical Co., Ltd Purchases of goods 10,305,185.60 140,522.12
Bingshan Technology Service
Purchases of goods 5,575,811.09 2,047,836.64
（Dalian） Co., Ltd.
Dalian Fuji Bingshan Control System
Purchases of goods 5,029,475.45 1,718,811.27
Co., Ltd.
Alphavita Bio-scientific (Dalian) Co.,
Purchases of goods 4,466,987.61 -
Ltd.
Bingshan Technology Service Receive labor
（Dalian） Co., Ltd. services 2,011,933.16 303,037.68
Dalian Shentong Electric Co., Ltd. Purchases of goods 1,680,077.95 9,480,036.79
Company under direct/indirect Receive labor
Control of Panasonic Co., Ltd services 1,621,316.09 -
Dalian Fuji Bingshan Vending
Purchases of goods 505,497.50 753,944.37
Machine Co., Ltd
Dalian Spindle Environmental
Purchases of goods 780,949.56 1,407,486.73
Facilities Co., Ltd
Dalian Bingshan Wisdom Park Co.,
Purchases of goods 80,441.60 100,943.39
Ltd
Dalian Bingshan Wisdom Park Co., Receive labor
Ltd services 47,169.81 -
Dalian Fuji Bingshan Vending
Purchases of goods 35,398.23 78,761.06
Machine Sales Co., Ltd
Receive labor
Dalian Bingshan Group Co., Ltd. 24,452.83 18,792.45
services
Shanghai Jingxue Freezing
Purchases of goods - 19,584.07
Equipment Co., Ltd
Sonyo Refrigeration System (Dalian)
Purchases of goods - 4,947,268.89
Co., Ltd.
Sonyo Compressor (Dalian) Co., Ltd. Purchases of goods - 429,782.52
Total — 207,658,829.93 105,203,094.06
(2) Sales of goods/ labour services provision
Related party Content Current year Last year
Company under direct/indirect Control
Sales of goods 285,292,151.76 147,935,120.42
of Panasonic Co., Ltd
Sonyo Cold Chain (Dalian) Co., Ltd Sales of goods 138,639,729.84 122,871,855.60
177
Related party Content Current year Last year
BAC Dalian Co., Ltd Sales of goods 69,977,098.57 65,002,512.47
Bingshan Technology Service （Dalian）
Sales of goods 32,203,558.67 40,641,988.78
Co., Ltd.
Dalian Fuji Bingshan Vending Machine
Sales of goods 16,843,047.06 18,327,608.54
Co., Ltd
Dalian Bingshan Wisdom Park Co., Ltd Sales of goods 13,402,551.72 323,553.82
MHI Bingshan Refrigeration (Dalian)
Sales of goods 7,181,290.12 5,537,667.76
Co., Ltd.
Alphavita Bio-scientific (Dalian) Co.,
Sales of goods 4,522,436.41 9,532,891.46
Ltd.
Dalian Spindle Environmental Facilities
Sales of goods 3,665,307.02 3,240,535.34
Co., Ltd
Dalian Honjo Chemical Co., Ltd Sales of goods 1,863,564.01 91,981.13
Dalian Bingshan Part Technology Co.,
Sales of goods 1,742,813.23 1,395,237.01
LTD
Linde Hydrogen Fueltech (Dalian) Co.,
Sales of goods 794,939.42 1,309,485.55
Ltd
Dalian Fuji Bingshan Control System
Sales of services 414,608.77 -
Co., Ltd.
Dalian Fuji Bingshan Control System
Sales of goods 153,752.97 654,160.22
Co., Ltd.
Dalian Bingshan Wisdom Park Co., Ltd Sales of services 141,509.43 -
Dalian Shentong Electric Co., Ltd Sales of goods 120,092.03 522,107.10
Dalian Jingxue Freezing Equipment Co.,
Sales of goods 96,698.39 102,957.82
Ltd
Dalian Bingshan Group Co., Ltd. Sales of service 43,018.86 -
Dalian Bingshan Group Co., Ltd. Sales of goods 26,445.02 -
Sonyo Compressor (Dalian)Co., Ltd. Sales of goods - 41,055,441.71
Sonyo Refrigeration System (Dalian)
Sales of goods - 23,645,169.22
Co., Ltd.
Dalian Bingshan Group Huahuida
Sales of goods - 18,888,460.18
Financial Leasing Co., Ltd
Jiangsu Jingxue Insulation Technology
Sales of goods - 2,524,416.77
Co., Ltd
Total — 577,124,613.30 503,603,150.90
(3) Assets Lease
178
(1) Assets rent out
Category of Current year Last year Lease
Lessee
assets rent out Lease Income Income
Dalian Bingshan Wisdom Park
Co., Ltd Land/property 9,013,347.56 8,189,918.99
MHI Bingshan Refrigeration
(Dalian) Co., Ltd. Plant 3,809,523.80 3,809,523.80
Linde Hydrogen Fueltech
(Dalian) Co., Ltd Plant 2,360,040.71 2,759,026.37
Sonyo Cold Chain (Dalian)Co. Plant /Employee
Ltd 2,160,513.31 3,465,470.95
dormitory
Company under direct/indirect Plant/ office /
Control of Panasonic Co., Ltd 1,483,508.26 336,180.42
dormitory
Dalian Jingxue Freezing
Equipment Co., Ltd. Plant and office 784,927.88 858,322.40
Wuhan Sikafu Power Control
Equipment Co., Ltd Plant 721,045.88 730,954.13
Bingshan Technology Service
（Dalian） Co., Ltd. Plant and office 355,081.77 443,699.06
Dalian Bingshan Part
Plant and office 194,954.13 -
Technology Co., Ltd.
Dalian Bingshan Group Co.,
Office 66,055.05 132,110.09
Ltd.
Dalian Spindle Environmental
Facilities Co., Ltd. Office 20,069.72 -
(2) Assets under lease
Category of Lease premium paid
Lessor
assets rent in Current year Last year
Dalian Bingshan Group Huahuida
Fixed asset 25,173,657.70 28,659,750.85
Financial Leasing Co., Ltd
(Continued)
Interests on lease liabilities Increased right-of-use assets
Lessor
Current year Last year Current year Last year
Dalian Bingshan
Group Huahuida
Financial Leasing Co., 2,067,080.20 698,321.11 - -26,150,305.01
Ltd
(4) Warranty provided by Related Parties
The national development fund planned to support the Company’s intelligent and green
equipment of cold chain and service industry base project, and provide the special fund to the
179
controlling shareholder of the Company, Bingshan Group. Please refer to the “Note VI. 33 long
term borrowings”.
Funds borrow from /lent to related party
Starting Ending
Name of the related party Amount Explanation
date date
Dalian Bingshan Group Project fund
Co., Ltd. 160,000,000.00 2016.03.14 2026.03.13 investment
Dalian Bingshan Group
Huahuida Financial 32,833,000.00 2022.09.29 2024.09.28 Factoring
Leasing Co., Ltd
Dalian Bingshan Group
Huayida Commercial 15,000,000.00 2023.12.25 2024.12.24 Factoring
Factoring Co., Ltd
Dalian Bingshan Group
Sale and
Huahuida Financial 13,805,309.73 2021.11.10 2026.11.09 leaseback
Leasing Co., Ltd
Dalian Bingshan Group
Sale and
Huahuida Financial 12,000,000.00 2022.01.07 2025.01.06 leaseback
Leasing Co., Ltd
Dalian Bingshan Group
Huahuida Financial 10,000,000.00 2023.01.09 2024.01.08 Factoring
Leasing Co., Ltd
Dalian Bingshan Group
Huahuida Financial 10,000,000.00 2021.05.20 2024.05.19 Factoring
Leasing Co., Ltd
Dalian Bingshan Group
Sale and
Huahuida Financial 6,600,000.00 2023.02.24 2025.02.23 leaseback
Leasing Co., Ltd
Dalian Bingshan Group
Huahuida Financial 5,481,000.00 2022.06.20 2024.06.19 Factoring
Leasing Co., Ltd
Dalian Bingshan Group
Huahuida Financial 4,559,849.17 2023.08.31 2024.08.30 Factoring
Leasing Co., Ltd
Dalian Bingshan Group
Huahuida Financial 3,499,485.17 2023.10.10 2024.10.09 Factoring
Leasing Co., Ltd
Dalian Bingshan Group
Huayida Commercial 2,367,580.50 2023.12.22 2024.12.21 Factoring
Factoring Co., Ltd
Dalian Bingshan Group
Sale and
Huahuida Financial 1,876,663.49 2021.06.10 2024.06.09 leaseback
Leasing Co., Ltd
Dalian Bingshan Group
Huahuida Financial 1,531,366.55 2023.09.08 2024.09.07 Factoring
Leasing Co., Ltd
Dalian Bingshan Group
Huahuida Financial 731,470.43 2023.10.17 2024.10.16 Factoring
Leasing Co., Ltd
Dalian Bingshan Group
Huahuida Financial 499,200.00 2023.05.22 2024.05.21 Factoring
Leasing Co., Ltd
180
Dalian Bingshan Group
Huayida Commercial 422,547.10 2023.12.08 2024.06.07 Factoring
Factoring Co., Ltd
Dalian Bingshan Group
Huayida Commercial 237,454.60 2023.12.05 2024.06.04 Factoring
Factoring Co., Ltd
Dalian Bingshan Group
Huayida Commercial 163,920.00 2023.12.15 2024.12.14 Factoring
Factoring Co., Ltd
(5) Asset transfer and debt restructuring among the related parties
Item Transaction Current year Last year
Purchase shareholdings of
Sanyo Corporation 87,171,300.00 929,148,000.00
affiliated company
Panasonic Corporation of Purchase shareholdings of
58,114,200.00 44,582,760.00
China Co., Ltd affiliated company
Dalian Bingshan Group Co., Sold shareholdings of
- 14,756,300.00
Ltd subsidiary
Dalian Zhonghuida
Sold shareholdings of
Refrigeration Technology - 6,472,000.00
subsidiary
Co., Ltd
Panasonic Corporation of Sold shareholdings of
- 70,990,000.00
China Co., Ltd affiliated company
Sonyo Cold Chain (Dalian) Purchase shareholdings of
- 37,152,300.00
Co., Ltd affiliated company
Total — 145,285,500.00 1,103,101,360.00
The 13rd meeting of the 9th directors’ meeting approved the acquisition of 40% of the
shareholdings of Sonyo Refrigeration (Dalian) Co. Ltd which is held by Panasonic Corporation
of China Co., Ltd, and 60% shareholdings of Sonyo Refrigeration (Dalian) Co. Ltd which is
held by Sanyo Electric (China) Co., Ltd. The share transfer price is based on the assessed value
of net assets of Sonyo Refrigeration (Dalian)Co. Ltd on March 31, 2023, and the transfer price
is 145.2855 million Yuan, of which 87.1713 million Yuan to Panasonic Corporation of China
Co., Ltd and 58.1142 million Yuan to Sanyo Electric (China) Co., Ltd. After the transaction,
Sonyo Refrigeration (Dalian) Co. Ltd becomes the subsidiary of the Company.
181
(6) Management Remuneration
Item Current year Last year
Total remuneration 5,033,700.00 4,895,800.00
(7) Other transactions with related party
None
iii. Balances with Related party
1.Accounts receivable due from related parties
Closing Balance
Item Related party Bad debt
Book Balance
Provision
Accounts receivable Sonyo Cold Chain (Dalian)Co. 84,045,272.25 4,997,695.76
Ltd
Accounts receivable BAC Dalian Co., Ltd 28,426,981.24 1,995,574.08
Accounts receivable Company under direct/indirect 12,595,875.91 174,589.96
Control of Panasonic Co., Ltd
Accounts receivable Dalian Bingshan Wisdom Park 10,199,546.41 807,170.38
Co., Ltd
Accounts receivable Dalian Fuji Bingshan Vending 6,270,661.55 440,200.44
Machine Co., Ltd
Accounts receivable MHI Bingshan Refrigeration 3,390,197.07 237,991.83
(Dalian) Co., Ltd.
Accounts receivable Alphavita Bio-scientific (Dalian) 2,791,425.71 200,691.99
Co., Ltd.
Accounts receivable Dalian Bingshan Part Technology 1,606,085.44 52,796.80
Co., LTD
Accounts receivable Dalian Spindle Environmental 1,072,064.56 75,258.93
Facilities Co., Ltd
Accounts receivable Bingshan Technology Service 965,375.22 67,769.34
（Dalian） Co., Ltd.
Accounts receivable Linde Hydrogen Fueltech 909,470.99 139,380.02
(Dalian) Co., Ltd
Accounts receivable Dalian Bingshan Group Huahuida 138,450.00 9,719.19
Financial Leasing Co., Ltd
Accounts receivable Dalian Fuji Bingshan Control 54,200.00 6,410.69
System Co., Ltd.
Bingshan Technology Service
Other receivable 100,000.00 100,000.00
（Dalian） Co., Ltd.
Dalian Fuji Bingshan Vending
Other receivable Machine Co., Ltd 48,000.00 7,608.00
Wuhan Sikafu Power Control
Other receivable Equipment Co., Ltd. 4,287.61 156.93
Prepayment Jiangsu Jingxue Insulation
Technology Co., Ltd. 4,088,975.80 -
Prepayment Company under direct/indirect
Control of Panasonic Co., Ltd 1,152,192.68 -
182
Closing Balance
Item Related party Bad debt
Book Balance
Provision
Sonyo Cold Chain (Dalian)Co.
Prepayment 636,235.00 -
Ltd
Prepayment BAC Dalian Co., Ltd 216,191.11 -
Dalian Fuji Bingshan Vending
Prepayment Machine Co., Ltd 176,869.45 -
Dalian Fuji Bingshan Vending
Prepayment Machine Sales Co., Ltd. 77,000.00 -
Bingshan Technology Service
Prepayment （Dalian） Co., Ltd. 74,297.11 -
Prepayment Dalian Bingshan Part Technology
Co., LTD 13,806.00 -
Contract asset Dalian Bingshan Wisdom Park
Co., Ltd 550,000.00 38,610.00
(Continued)
Opening Balance
Item Related party Bad debt
Book Balance
Provision
Accounts receivable Company under direct/indirect 145,605,125.57 11,219,927.46
Control of Panasonic Co., Ltd
Accounts receivable BAC Dalian Co., Ltd 17,739,655.64 1,245,323.82
Accounts receivable Dalian Fuji Bingshan Vending 7,292,421.55 548,862.49
Machine Co., Ltd
Accounts receivable Bingshan Technology Service 5,804,599.87 426,864.25
（Dalian） Co., Ltd.
Accounts receivable MHI Bingshan Refrigeration 3,981,739.22 279,518.10
(Dalian) Co., Ltd.
Accounts receivable Dalian Bingshan Part Technology 2,426,739.72 250,341.12
Co., LTD
Accounts receivable Dalian Bingshan Group Huahuida 2,411,867.26 169,313.08
Financial Leasing Co., Ltd
Accounts receivable Alphavita Bio-scientific (Dalian) 1,224,109.36 85,932.48
Co., Ltd.
Accounts receivable Dalian Bingshan Wisdom Park 1,139,243.27 255,895.91
Co., Ltd
Accounts receivable Linde Hydrogen Fueltech 841,284.21 59,058.15
(Dalian) Co., Ltd
Accounts receivable Dalian Spindle Environmental 750,121.11 52,658.50
Facilities Co., Ltd
Accounts receivable Dalian Fuji Bingshan Control 550,800.00 49,630.32
System Co., Ltd.
Accounts receivable Dalian Shentong Electric Co., Ltd 94,897.33 6,661.79
Contract asset Company under direct/indirect
Control of Panasonic Co., Ltd 1,982,037.10 612,603.41
Contract asset Dalian Bingshan Wisdom Park
Co., Ltd 109,569.10 19,340.79
183
Opening Balance
Item Related party Bad debt
Book Balance
Provision
Prepayment Dalian Shentong Electric Co., Ltd 8,402,006.53 -
Company under direct/indirect
Prepayment Control of Panasonic Co., Ltd 3,825,488.41
Bingshan Technology Service
Prepayment （Dalian） Co., Ltd. 825,789.25 -
Prepayment Dalian Bingshan Group Huahuida
Financial Leasing Co., Ltd 308,310.02 -
Prepayment BAC Dalian Co., Ltd 58,513.00 -
Prepayment Dalian Spindle Environmental
Facilities Co., Ltd 36,455.00 -
Dalian Fuji Bingshan Vending
Other receivable Machine Co., Ltd 278,020.00 10,175.53
Bingshan Technology Service
Other receivable 100,000.00 69,410.00
（Dalian） Co., Ltd.
2. Accounts Payable due from Related Party
Closing Opening
Item Related party
Balance Balance
Accounts Jiangsu Jingxue Insulation
Payable Technology Co., Ltd 65,052,640.75 68,660,038.43
Accounts
BAC Dalian Co., Ltd 21,731,458.82 20,678,948.10
Payable
Accounts
Sonyo Cold Chain (Dalian)Co., Ltd 10,067,451.24 -
Payable
Accounts Dalian Bingshan Metal Technology
Payable Co., Ltd 9,745,165.83 14,347,841.71
Accounts
Dalian Honjo Chemical Co., Ltd. 6,672,533.86 -
Payable
Accounts Dalian Bingshan Part Technology
Payable Co., LTD 6,266,070.43 7,264,112.80
Accounts Jiangsu Jingxue Insulation
Payable Environmental Engineering Co., Ltd 2,896,300.00 2,896,300.00
Accounts Company under direct/indirect
Payable Control of Panasonic Co., Ltd 864,418.25 11,517,452.19
Accounts Dalian Spindle Environmental
Payable Facilities Co., Ltd 794,006.00 1,247,400.00
Accounts Dalian Fuji Bingshan Control
Payable System Co., Ltd. 502,571.47 1,942,256.73
Accounts Bingshan Technology Service
Payable （Dalian） Co., Ltd. 126,241.74 282,405.30
Accounts
Dalian Shentong Electric Co., Ltd - 1,396,176.88
Payable
Dalian Bingshan Group Huayida
Other payable 15,000,000.00 -
Commercial Factoring Co., Ltd.
Dalian Bingshan Group Huahuida
Other payable 7,407,941.90 -
Financial Leasing Co., Ltd.
184
Closing Opening
Item Related party
Balance Balance
Company under direct/indirect
Other payable 3,273,305.50 4,502,046.38
Control of Panasonic Co., Ltd
Bingshan Technology Service
Other payable 104,625.50 -
（Dalian） Co., Ltd.
Other payable Sonyo Cold Chain (Dalian)Co., Ltd 91,779.71 -
Jiangsu Jingxue Insulation
Other payable 70,000.00 666,864.48
Environmental Engineering Co., Ltd
MHI Bingshan Refrigeration
Other payable - 170,000.00
(Dalian) Co., Ltd.
Dalian Jingxue Freezing Equipment
Other payable - 70,000.00
Co., Ltd.
Dalian Bingshan Group Huahuida
Other payable - 1,172.61
Financial Leasing Co., Ltd.
Bingshan Technology Service
Contract liability 2,337,426.58 -
（Dalian） Co., Ltd.
Linde Hydrogen Fueltech (Dalian)
Contract liability 2,138,974.27 2,274,454.09
Co., Ltd
Company under direct/indirect
Contract liability 313,952.83 1,299,686.95
Control of Panasonic Co., Ltd
Contract liability Sonyo Cold Chain (Dalian)Co. Ltd 35,605.27 -
Dalian Bingshan Group Huahuida
Contract liability - 4,206,191.86
Financial Leasing Co., Ltd
Dalian Spindle Environmental
Contract liability - 736,424.50
Facilities Co., Ltd
Other current Linde Hydrogen Fueltech (Dalian)
liability Co., Ltd 319,616.84 -
Other current Bingshan Technology Service
liability （Dalian） Co., Ltd. 303,865.45 -
Other current Company under direct/indirect
liability Control of Panasonic Co., Ltd 35,021.95 130,044.39
Other current
Sonyo Cold Chain (Dalian)Co., Ltd 4,628.68 -
liability
Other current Dalian Bingshan Group Huahuida
liability Financial Leasing Co., Ltd - 546,804.94
Other current Dalian Spindle Environmental
liability Facilities Co., Ltd - 81,006.69
Dalian Bingshan Group Huahuida
Lease payable 656,980.83 983,501.51
Financial Leasing Co., Ltd
Non-current
Dalian Bingshan Group Huahuida
liability due 25,140,961.04 34,388,781.83
Financial Leasing Co., Ltd
within 1 year
Long-term Dalian Bingshan Group Huahuida
payable Financial Leasing Co., Ltd 10,331,937.30 31,009,644.16
Short-term Dalian Bingshan Group Huayida
borrowing Commercial Factoring Co., Ltd. 2,976,345.47 -
iv. Related Party Commitment
None
185
v. Others
None
XIII. Share-Based Payment
None
XIV. Contingency & commitment
1. Commitment
None
2. Contingency
Up to December 31, 2023, guarantee obligations undertaken by the Company due to
financial leasing.
The Company sold refrigerating house equipment to Guizhou Pubu Cold Chain Food
Investment Co., Ltd (“Pubu Cold Chain”) in the form of financial leasing. The Company as
a seller singed finance lease contract with Dalian Bingshan Group Huahuida Financial
Leasing Co., Ltd (hereinafter referred to as ‘Huahuida’) as both a buyer and a lessor and
Pubu Cold Chain as a lessee. The contract price is 25.705million Yuan. In case the lease
premium is delayed by the lessee, the Company needs to pay lease premium on behalf of
the lessee and be obliged to the buy back responsibility. Pubu Cold Chain issued an
unconditional, irrevocable and joint liability counter guarantee, and the Company is the
beneficiary. Guarantee scope covers the full liability because of the sales in the form of
finance lease. As at 31 December 2023, the balance of the guarantee obligation of the
financial lease is RMB 6.5958million Yuan.
The Company sold water chiller and heat pump to Shangdong Jiechuang Energy
Technology Co., Ltd (“Shandong Jiechuang”) in the form of financial lease. The Company
as a seller singed finance lease contract with Huahuida as both a buyer and a lessor and
Shandong Jiechuang as a lessee. The contract price is 6.998million Yuan. Shandong
Jiechuang had made 10% down payment, and remaining 6.2982million Yuan is underlined
the leasing contract amount. In case the lease premium is delayed by the lessee, the
Company needs to pay lease premium on behalf of the lessee and be obliged to the buy
back responsibility. Shandong Jiechuang issued an unconditional, irrevocable and
joint liability counter guarantee, and the Company is the beneficiary. Guarantee scope
covers the full liability because of the sales in the form of financial lease. As at 31
December 2023, the balance of the guarantee obligation of the financial lease is
RMB4.4262 million Yuan.
186
The Company sold refrigerating house equipment to Liuyang Zhongjie Technology
Investment Co., Ltd (“Liuyang Zhongjie”) in the form of financial lease. The Company as a
seller singed finance lease contract with Huahuida as both a buyer and a lessor and Liuyang
Zhongjie as a lessee. The contract price is 9.831million Yuan. In case the lease premium is
delayed by the lessee, the Company needs to pay lease premium on behalf of the lessee and
be obliged to the buy back responsibility. Liuyang Zhongjie issued an unconditional,
irrevocable and joint liability counter guarantee, and the Company is the beneficiary.
Guarantee scope covers the full liability because of the sales in the form of financial lease.
As at 31 December, 2023, the balance of the guarantee obligation of the financial lease is
RMB 5.3227million Yuan.
The Company sold refrigeration equipment, air conditioning and production line equipment
to Shanxi Yiming Food Co., Ltd (‘Shanxi Yiming’) in the form of financial lease. The
Company as a seller singed finance lease contract with Huahuida as both a buyer and a
lessor and Shanxi Yiming as a lessee. The contract price is 28.2311million Yuan. In case
the lease premium is delayed by the lessee, the Company needs to pay lease premium on
behalf of the lessee and be obliged to the buy back responsibility. Shareholders Shanxi
Yiming and nature person issued an unconditional, irrevocable and joint liability counter
guarantee, and the Company is the beneficiary. Guarantee scope covers the full liability
because of the sales in the form of financial lease. As at 31 December, 2023, the balance of
the guarantee obligation of the financial lease is RMB 23.1802million Yuan.
Dalian Bingshan-RYOSETSU Quick Freezing Equipment Co.,Ltd (‘Bingshan-
RYOSETSU’), the subsidiary of the Company sold refrigeration equipment to Jilin Fuyu
Agricultural Technology Co., Ltd (‘Jinlin Fuyu’) in the form of financial lease. Bingshan-
RYOSETSU as a seller singed finance lease contract with Huahuida as both a buyer and a
lessor and Jinlin Fuyu as a lessee. The contract price is 20.50million Yuan. In case the lease
premium is delayed by the lessee, Bingshan- RYOSETSU needs to pay lease premium on
behalf of the lessee and be obliged to the buy back responsibility. Shareholders Jinlin Fuyu
and nature person issued an unconditional, irrevocable and joint liability counter guarantee,
and Bingshan- RYOSETSU is the beneficiary. Guarantee scope covers the full liability
because of the sales in the form of financial lease. As at 31 December, 2023, the balance of
the guarantee obligation of the financial lease is RMB 18.8146million Yuan.
Until 31 December, 2023, the balance of all guarantee obligation of the financial lease is
RMB 58.3395 million Yuan. There is no situation where the Company needs to undertake
the liability as the lessees’ default.
There are no other significant or contingent matters to be disclosed until December, 2023
187
XV. Events after the Balance Sheet Date
1. Unadjusted significant events
None
2. Information about profit distribution
Item Content
Planned profit/ dividend distribution 25,296,375.21
The 12nd meeting of the 9th generation of board
approved the profit appropriation policy for the year
Profit/dividend approved for of 2023, based on 843,212,507.00 numbers of share
distribution declaration in total, paying out cash dividend of 0.3Yuan for
every 10 shares (before tax) and cash dividend of B
shares are paid in Hong Kong dollars.
3. Sales Return
There is no significant sales return after the balance sheet date.
4. Others
Except the subsequent event disclosed above, the Company has no other significant
subsequent event.
XVI. Other Significant Events
1. Error correction and effect in previous period
No.
2. Debt Restructuring
In 2023, Bingshan Group Engineering Co., Ltd, Tianjin Sunac Shengyuan Real Estate Co.,
LTD. (hereinafter referred to as "Tianjin Sunac") and Guangzhou Wanda Cultural Tourism
City Investment Co., LTD. (hereinafter referred to as "Guangzhou Wanda Cultural Tourism")
signed a commercial contract, and Guangzhou Wanda Cultural Tourism will repay the debt to
Bingshan Group Engineering Co., Ltd with the right-of -use of 17 apartments and parking
space that it subscribed for Tianjin SunAC. The price of the house and parking space is
21.707 million Yuan, the debt written off amount is 15.22 million yuan, and Bingshan Group
Engineering Co., Ltd pays the difference of 6.5476 million Yuan in cash. Bingshan Group
Engineering Co., Ltd paid a total of 6.54 million Yuan in two separate payments in 2023, and
the above properties have completed the record registration of the contract in the Tianjin
Municipal Commission of Housing and Construction in 2023.
188
3. Asset exchange
(1) The exchange of non-monetary assets
No.
(2) The exchange of other assets
No.
4. Annuity Plan
No.
5. Operation termination
No.
6. Segment Information
The management of the group divided the business into 2 segments based on the geographic
area: Northeast China and Central China. The Northeast is the Company’s general headquarters
and the subsidiaries registered in Dalian. The Central includes Chengdu Bingshan Refrigeration
Engineering Co., Ltd, Wuhan New World Refrigeration Industrial Co., Ltd and its subsidiary,
Wuhan Lanning Energy Technology Co., Ltd. and Wuhan New World Air-conditioning Refrigeration
Engineering Co., Ltd.
(1) The basis and accounting policies of reporting segments
The internal organization structure, management requirements and internal report scheme are
the determination basis for the Company to set the operating segments. The segments are those
satisfied the following requirements.
1). The segment can generate revenue and incur expenses.
2). The management personnel can regularly evaluate the operation results of segments and
allocate resource, assess its performance.
3). The financial situation, operation results, cash flow and other accounting information of
segments can be acquired.
The group confirms the report segments based on the operating segments. The transfer price
among segments is set base on the market price. The assets and related expenses in common use
are allocated to different segments based on their proportion of revenue.
(2) The financial information of reporting segments
Amount unit ：Ten thousand Yuan
Northeast Central
Items Offset Total
China China
1 Operating income 530,652.74 32,697.34 -81,755.93 481,594.15
189
Northeast Central
Items Offset Total
China China
2 Cost 452,202.87 28,961.85 -80,604.97 400,559.75
Impairment loss on assets -1,598.13 -19.38 176.94 -1,440.57
Impairment loss on credit -5,471.28 -825.92 -676.01 -6,973.21
Depreciation and
amortization 14,208.67 833.36 - 15,042.03
3 Investment income from
associates and joint venture -430.08 45.75 -104.14 -488.47
4 Operating profits(loss) 23,385.81 -1,695.78 -15,169.41 6,520.62
5 Income tax 1,117.34 89.36 -103.53 1,103.17
6 Net profit(loss) 22,268.47 -1,785.14 -15,065.88 5,417.45
7 Total assets 1,068,080.89 47,663.74 -299,459.80 816,284.83
8 Total liabilities 548,471.77 36,864.46 -79,455.64 505,880.59
(3) Others
None
7. Other important transactions and matters affect the investor's decision
The group hasn’t had other important transactions and matters affect the investor's decision in
this period.
XVII. Notes to the Main Items of the Financial Statements of Parent Company
1. Accounts receivable
(1) Bad debt provisions under accounting aging analysis method:
Aging Closing Balance Opening Balance
Within 1 year 457,075,717.70 536,467,765.87
1-2 years 124,339,052.45 71,727,073.34
2-3 years 58,073,083.27 56,755,645.42
Over 3 years 109,679,441.52 72,661,252.26
3-4 years 49,782,646.14 3,330,453.62
4-5 years 2,186,288.76 21,498,453.03
Over 5 years 57,710,506.62 47,832,345.61
Total 749,167,294.94 737,611,736.89
(2) Accounts receivable category
Closing Balance
Item Booking balance Provision
Booking value
Amount % Amount %
190
Closing Balance
Item Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
on group 749,167,294.94 100.00 136,234,112.03 18.18 612,933,182.91
(1) Accounting age
as characters 492,240,628.86 65.71 136,234,112.03 27.68 356,006,516.83
(2) Related party
within
consolidation 256,926,666.08 34.29 - - 256,926,666.08
scope
Total 749,167,294.94 100.00 136,234,112.03 18.18 612,933,182.91
191
(Continued)
Opening Balance
Item Booking balance Provision Booking
Amount % Amount % balance
Bad debt provision
737,611,736.89 100.00 107,657,087.39 14.60 629,954,649.50
on group
(1) Accounting age
388,615,076.25 52.69 107,657,087.39 27.70 280,957,988.86
as characters
(2) Related party
within
348,996,660.64 47.31 - - 348,996,660.64
consolidation
scope
Total 737,611,736.89 100.00 107,657,087.39 14.60 629,954,649.50
1) Bad debt provisions on group basis
Closing Balance
Aging Provision for bad Drawing Proportion
Accounts receivable
debts (%)
Within 1 year 204,061,949.25 14,325,148.84 7.02
1-2 years 120,426,154.82 20,159,338.32 16.74
2-3 years 58,073,083.27 17,903,931.57 30.83
3-4 years 49,782,646.14 24,557,779.34 49.33
4-5 years 2,186,288.76 1,577,407.34 72.15
Over 5 years 57,710,506.62 57,710,506.62 100.00
Total 492,240,628.86 136,234,112.03 —
(3) Bad debt provision
Change during the year
Closing
Category Opening balance
Accrued Collected/ Balance
Written-off Other
reversed
Bad debt
107,657,087.39 27,893,374.74 - 758,749.50 1,442,399.40 136,234,112.03
provision
Total 107,657,087.39 27,893,374.74 - 758,749.50 1,442,399.40 136,234,112.03
192
(4) Accounts receivable written off in current period.
Item Written off amount
Receivable actually written off 758,749.50
(5) Based on closing balance ranking, sum of the top five significant receivable and contract
asset are 328,102,168.30 Yuan, representing 37.42% of total receivables and contract asset at the
year end. 50,866,005.17Yuan bad debt provision is provided respectively.
2. Other Receivables
Item Closing Balance Opening Balance
Interest receivable - -
Dividend receivable 110,000,000.00 -
Other receivable 28,883,665.74 36,021,805.53
Total 138,883,665.74 36,021,805.53
2.1 Dividend receivable
Item Closing Balance Opening Balance
Sonyo Compressor (Dalian)Co., Ltd. 110,000,000.00 -
Total 110,000,000.00 -
2.2 Other receivable
(1) The category of other receivables
Items Closing Balance Opening Balance
Receivables and payables 20,260,866.63 22,444,622.16
Deposits 8,478,407.11 13,733,003.58
Petty cash 580,451.46 589,402.48
Total 29,319,725.20 36,767,028.22
193
(2) Other receivable listed by account aging
Aging Closing Balance Opening Balance
Within 1 year 3,049,940.86 10,080,508.11
1-2 years 3,316,384.23 4,307,883.00
2-3 years 1,315,000.00 20,750,000.00
Over 3 years 21,638,400.11 1,628,637.11
3-4 years 20,210,000.00 430,072.11
4-5 years 229,835.11 -
Over 5 years 1,198,565.00 1,198,565.00
Total 29,319,725.20 36,767,028.22
(3) The bad debt provision of other receivable
1st stage 2nd stage 3rd stage
Expected Expected credit Expected credit loss
bad debt
credit loss loss within the within the whole Total
provision
within 12 whole period (no period (impairment
months impairment) incurred)
Opening balance 596,484.59 - 148,738.10 745,222.69
Opening balance
— — — —
during the year
--transfer to the
- - - -
2nd stage
--transfer to the
- - - -
3rd stage
--reverse to the
- - - -
2nd stage
----reverse to the
- - - -
1st stage
Accrued - - - -
Reverse 273,476.68 - - 273,476.68
Cancelation - - - -
Written off 35,686.55 - - 35,686.55
Other movement - - - -
Closing balance 287,321.36 - 148,738.10 436,059.46
(4) Bad debt provision details
194
Change during the year
Opening Closing
Category Collected/
balance Accrued Written-off Others Balance
reversed
Bad debt
745,222.69 - 273,476.68 35,686.55 - 436,059.46
provision
Total 745,222.69 - 273,476.68 35,686.55 - 436,059.46
(5) Other receivables from the top 5 debtors
% of Closing
Closing
Name Category Aging the total Balance of
Balance
OR Provision
Top 1 Receivable 20,000,000.00 3-4 years 68.21 -
Top 2 Other deposit 1,100,000.00 Over5 years, 3.75 40,260.00
Top 3 Bid deposit 1,000,000.00 1-2 years 3.41 36,600.00
Top 4 Bid deposit 800,000.00 Within 1 year 2.73 29,280.00
Top 5 Bid deposit 800,000.00 Over5 years, 2.73 29,280.00
Total — 23,700,000.00 — 80.83 135,420.00
195
3. Long-term equity investments
(1) Category of long-term equity investments
Closing Balance Opening Balance
Item
Closing Balance Provision Book Value Opening Balance Provision Book Value
Investment of subsidiaries 2,416,830,861.29 - 2,416,830,861.29 2,163,545,361.29 - 2,163,545,361.29
Investment of affiliates
513,550,283.58 - 513,550,283.58 557,452,792.51 - 557,452,792.51
and JV
Total 2,930,381,144.87 - 2,930,381,144.87 2,720,998,153.80 - 2,720,998,153.80
(2) Investments of subsidiaries
Provision for Increase/Decrease
Provision for
Beginning impairment
Investee Provision for Ending balance impairment
balance at beginning Increased Decreased Others
impairment at year end
of year
Dalian Bingshan Group
Engineering Co., Ltd 193,749,675.77 - 100,000,000.00 - - - 293,749,675.77 -
Dalian Bingshan Group Sales Co.,
Ltd 20,722,428.15 - - - - - 20,722,428.15 -
Dalian Bingshan Air-Conditioning
Equipment Co., Ltd 45,272,185.00 - 8,000,000.00 - - - 53,272,185.00 -
Dalian Bingshan Guardian
Automation Co., Ltd 50,638,361.52 - - - - - 50,638,361.52 -
Dalian Bingshan-RYOSETSU
Quick Freezing Equipment Co., 59,356,051.19 - - - - - 59,356,051.19 -
Ltd
196
Provision for Increase/Decrease
Provision for
Beginning impairment
Investee Provision for Ending balance impairment
balance at beginning Increased Decreased Others
impairment at year end
of year
Dalian Universe Thermal
Technology Co., Ltd 48,287,589.78 - - - - - 48,287,589.78 -
Wuhan New World Refrigeration
Industrial Co., Ltd 184,674,910.81 - - - - - 184,674,910.81 -
Dalian Bingshan Engineering &
Trading Co., Ltd 71,537,064.86 - - - - - 71,537,064.86 -
Sonyo Compressor (Dalian)Co.,
Ltd 1,380,455,603.23 - - - - - 1,380,455,603.23 -
Sonyo Refrigeration System
(Dalian) Co., Ltd 108,851,490.98 - - - - - 108,851,490.98 -
Sonyo Refrigeration (Dalian) Co.,
Ltd - - 145,285,500.00 - - - 145,285,500.00 -
Total 2,163,545,361.29 - 253,285,500.00 - - - 2,416,830,861.29 -
(3) Joint ventures& affiliated companies
Increase/Decrease
Gains and Provision
Provision for Adjustment
Beginning losses Provision for
Investee impairment of other Changes of Cash bonus or Ending balance
balance Increased Decreased recognized for Others impairment
at beginning comprehensi other equity profits announced
under the impairment at year end
of year ve income
equity method
1. Affiliated
company
Dalian Honjo
Chemical Co., Ltd 9,819,096.80 - - - -759,072.44 - - -900,000.00 - - 8,160,024.36 -
Keinin-Grand
Ocean Thermal
Technology 60,089,313.51 - - - -509,338.51 - - -2,000,000.00 - - 57,579,975.00 -
(Dalian) Co., Ltd
197
Increase/Decrease
Gains and Provision
Provision for Adjustment
Beginning losses Provision for
Investee impairment of other Changes of Cash bonus or Ending balance
balance Increased Decreased recognized for Others impairment
at beginning comprehensi other equity profits announced
under the impairment at year end
of year ve income
equity method
Dalian Fuji
Bingshan Vending 111,101,339.93 - - - -43,490,921.84 - - - - - 67,610,418.09 -
Machine Co., Ltd
MHI Bingshan
Refrigeration 15,401,109.10 - - - 1,142,546.44 - - - - - 16,543,655.54 -
(Dalian) Co., Ltd.
Dalian Fuji
Bingshan Vending
Machine Sales Co., - - - - - - - - - - -
Ltd
Jiangsu Jingxue
Insulation
Technology Co., 140,124,248.76 - - - 5,840,827.15 - - -1,610,172.00 - - 144,354,903.91 -
Ltd
Bingshan Metal
Technical Service
（Dalian） Co., 175,313,807.46 - - - 31,071,464.97 - - -33,134,422.30 - - 173,250,850.13 -
Ltd.
Dalian Bingshan
Group Huahuida
Financial Leasing 45,603,876.95 - - - 1,197,707.15 - - -751,127.55 - - 46,050,456.55 -
Co., Ltd
Total 557,452,792.51 - - - -5,506,787.08 - - -38,395,721.85 - - 513,550,283.58 -
198
4. Operating revenue and cost
Current year Last year
Item
Revenue Cost Revenue Cost
Revenue from main
1,075,630,556.46 894,335,541.56 976,567,011.13 853,599,677.62
operation
Revenue from other
71,936,541.24 55,064,727.51 71,575,982.20 56,250,851.97
operation
Total 1,147,567,097.70 949,400,269.07 1,048,142,993.33 909,850,529.59
5. Investment income
Items Current year Last year
Long-term equity investment gain under cost method 137,049,291.85 153,482,615.76
Long-term equity investment gain under equity method -5,506,787.08 -37,651,689.22
Gain from holding of other non-current financial assets 5,782,304.24 20,657,215.39
Discounting fees for bank acceptance note -159,560.15 -
Gain from disposing long-term equity investment - 110,083,973.75
Gain from disposal of other non-current financial assets - 43,296,525.04
Gain on debt restructuring - -
Total 137,165,248.86 289,868,640.72
6. Others
None
XVIII. Approval of Financial Statements
The parent and consolidated financial statements of the Company were approved by the Board
of Directors of The Company on April 24, 2024.
199
XIX. Supplementary Information to the Financial Statements
1. Non-operating profit or loss
Items Current year Notes
Gain or loss from disposal of non-current assets (including written
-6,656,241.40
off part of the impairment provision)
Government grants recorded into profit or loss 8,263,130.89
The gain or loss of fair value changes arising from the holding of
financial assets and financial liabilities by non-financial enterprises
14,073,910.32
and the loss or profit arising from the disposal of them, apart from
the effective hedging for the normal business operation.
Expenses for using funds from non-financial institution recognized
-
in current profit/loss
Profits/loss from investments or management of assets entrusted by
-
others
Investment income on entrusted loan -
Assets impairment provision accrued due to force majeure, e.g.:
-
suffering natural disasters
Reversal of impairment provision of accounts receivable separately
3,784,207.57
tested for impairment
Gains from acquisition of subsidiary or associates when initial cost
is less than the fair value of identifiable net asset of invested -
company
Net gain/loss of subsidiary from combination under same control
-
between the beginning of year and consolidation date.
Profits/loss from non-monetary assets exchange -
Profit or loss from debts restructuring 1,791,602.29
One-off expenses incurred for discontinued operation activities such
3,928,060.93
as the expense of relocating employees
Effects of gain/loss from one-off adjustments of gain/loss based on
-
laws and regulations of taxation and accounting.
Share payment arising from the cancellation or modification of
-
share incentive plans
For cash settled share payment, gains and losses arising from
-
changes in the fair value of employee payable after the exercise date
The profits/gains from changes of fair value for investment property
-
subsequently measured at fair value model
Gain/loss on excessive part from the transaction where the trading
-
price is obviously unfair.
200
Items Current year Notes
Gains/ loss from contingencies beyond the normal business 10,206,786.86
Custodian fees obtained from entrusted operations -
Non-operating revenue and expense besides the above items 2,831,968.96
Other profit or loss -
Subtotal 38,223,426.42
Effect on income tax 5,162,725.13
Attributable to minority shareholders’ equity (after tax) 168,249.63
Total 32,892,451.66
2. Return on equity and earnings per share
Earnings per share
Weighted
(EPS)
Profit of report period average return
Basic Diluted
on net assets (%)
EPS EPS
Net profit attributable to shareholders of
1.63 0.06 0.06
parent company
Net profit after deducting non-recurring gains
and losses attributable to shareholders of 0.54 0.02 0.02
parent company
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd
April 24, 2024
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